Greens push account portability stopgap

The office of Greens MP and banking spokesperson Adam Bandt has said today that he will introduce a private members Bill to parliament on Monday, aiming to force banks to forward direct debits and credits when customers switch banks.

The office of Greens MP and banking spokesperson Adam Bandt has said today that he will introduce a private members Bill to parliament on Monday, aiming to force banks to forward direct debits and credits when customers switch banks.

The forwarding laid out under the Bill, dubbed The Banking and Consumer Credit Protection Amendment (Mobility and Flexibility) Bill 2011, would have to occur for 13 months after a customer made the switch to another bank.

"My Bill will mean direct debits and credits can follow customers when they switch banks," Bandt said in a statement, adding that he hoped that the measure would help increase banking competition by removing a barrier to switching accounts.

"A customer's old and new banks will have to make sure there is a seamless changeover."

This step doesn't go as far as asking banks to implement full bank account portability, which would see customers able to take their bank account number with them when they move to a new bank.

Following a Senate inquiry into competition in the banking industry in December, the government appointed former Reserve Bank governor Bernie Fraser to conduct a feasibility study into the appropriateness of an account number portability system.

Fraser was to examine the technological limits surrounding portability, how the system can best preserve existing banking regulations and the benefits, costs and risks of such a system. Fraser is due to report back to the Senate with his findings by the end of the month.

Federal Treasurer Wayne Swan is yet to release the results of the Fraser review on accountability portability and the government's response, but Bandt said he still wants the government to commit to such a step.

"In the longer term, we want to see the government commit to implementing a portable account number, but this Bill is an important step towards full account portability for the medium term."

Banks have spoken out against introducing such a system, saying that it would be costly and complex.

"You could certainly solve the problem [of account number portability] but at an horrific cost. Now you have to ask yourself a question: does the value you bring from doing this justify the horrific cost? I can tell you, it would be an horrific cost," Westpac's group executive Technology Bob McKinnon said two months ago.

Earlier, Bendigo Bank managing director said that he didn't feel the system was necessary to improve competition. National Australia Bank (NAB) CEO Cameron Clyne warned the inquiry not underestimate the complexity of banking systems.

Newsletters

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All