LexisNexis Practical Guidance®

In terms of “banking regulation” in Australia, legal principles in banking and finance law are drawn from a range of legislation. The most obvious one to legal practitioners would be the Banking Act 1959 (Cth) (Banking Act). It is useful for legal practitioners to note that the Banking Act serves a number of purposes, including to regulate banking, and to make provision for the protection of currency.

This guidance note introduces the Banking Act and explains selected key definitions of the Banking Act, including “bank”, “authorised deposit-taking institutions” or “ADIs”, and “banking business”.

See Introduction to the Banking Act and selected key definitions.

This guidance note explains selected key provisions of the Banking Act, including those relating to the unclaimed money’s regime, and the s 66 controls relating to the used of restricted words and expressions, such as “credit union”.

See Selected key provisions of the Banking Act.

The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 Cth) (AML/CTF Act) is part of a comprehensive legislative package designed to bring Australia into line with international best practice to deter money laundering and terrorism financing. This guidance note provides an introduction to the AML/CTF Act, and an explanation of the roles of AUSTRAC and the Attorney-General’s Department in AML/CTF.

This guidance note explains what is money laundering and what is terrorism financing. It explains selected key definitions that are relevant to legal practitioners, and provides examples to aid legal practitioners’ understanding of AML/CTF terminology. This guidance note also covers some key concepts that legal practitioners are likely to come across, including what is the money laundering cycle, and what is the difference between money laundering and terrorism financing.

See What is money laundering and what is terrorism financing?

This guidance note explains the key obligations of reporting entities under the AML/CTF Act. They include enrollment and registration with AUSTRAC, establishment and management of an AML/CTF program, conducting customer due diligence, requirements relating to reporting, and requirements relating to record keeping obligations. This guidance note also covers some key concepts that legal practitioners are likely to come across, including what is a risk-based approach to regulatory compliance, who are “politically exposed persons” and a reporting entity’s dealings with them, and what is “KYC” (being the collection and verification of minimum “know your customer” information). It is useful that legal practitioners have working knowledge of these concepts when communicating with and advising clients.

See Key obligations under the anti-money laundering and counter-terrorism financing legislation.

The Privacy Act 1988 (Cth) (Privacy Act) regulates the handling of personal information about individuals. Sensitive information and credit information are examples of subsets of personal information, and they are subject to specific requirements. The Privacy Act includes thirteen Australian Privacy Principles (APPs). The APPs set out standards, rights and obligations for the handling, holding, use, accessing and correction of personal information, including sensitive information.

The Office of the Australian Information Commissioner (OAIC) is an independent statutory agency, headed by the Australian Information Commissioner. One of the key functions that the OAIC performs relate to privacy.

Part IIIA of the Privacy Act regulates consumer credit reporting in Australia. Part IIIA is supported by the Privacy (Credit Reporting) Code 2014 (Version 2) (Cth), which is often referred to as the “CR Code”. The CR Code is a mandatory code, and it binds all credit reporting bodies and credit providers.

The Spam Act 2003 (Cth) (Spam Act) contain specific provisions regarding direct marketing. It is useful for legal practitioners to have working knowledge of the Spam Act because (among other things), the APPs provide that where the act or practice of an APP entity (being the agencies and organisations that have responsibilities under the Privacy Act) is subject to the Spam Act, APP 7 does not apply to the extent that the Spam Act applies.

This subtopic outlines for legal practitioners some key concepts and key definitions of the Privacy Act, the APPs, the CR Code and the Spam Act. It also outlines some key provisions of these legislation. Legal practitioners are likely to come across these concepts, definitions and provisions, and it is useful to have working knowledge of them when advising clients.

Each guidance note in this subtopic also contains useful tools for legal practitioners.

This guidance note explains what is personal information, what is sensitive information, what are the APPs, who has responsibilities under the Privacy Act, what is credit reporting, who are credit reporting bodies, and what is the role and powers of the OAIC.

See Privacy Act basics.

This guidance note explains who are “APP entities” and provide more information on each of the thirteen APPs.

See Australian privacy principles basics.

This guidance note starts with an outline of the credit reporting legal framework. It then explains the structure of Pt IIIA of the Privacy Act that relates to credit reporting, provide an overview of the rules, and explains selected key definitions, including “credit reporting business”, “affected information recipients”, “credit information”, “credit reporting information”, “credit eligibility information”, “CRB derived information” and “CP derived information”. “Notifiable matters” is a key CR Code concept, and its meaning is also explained.

See Credit reporting basics.

This guidance note explains how privacy legislation interacts with the Spam Act. The Spam Act prohibits the sending of unsolicited commercial electronic messages. Subject to compliance with some key rules, commercial electronic messages can be sent if the received have given express or inferred consent. These key rules, together with the concepts and definitions of commercial electronic messages, express consent and inferred consent are explained. The Australian Communications and Media Authority enforces the Spam Act, and its role and functions are explained.

See Spam Act basics.

There are many banking and finance legislation that may be relevant to legal practitioners. These include the Banking Act 1959 (Cth) (see Overview — Banking Act — the essentials), Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (see Overview — Anti-money laundering and counter-terrorism financing legislation), and Privacy Act 1988 (Cth) (see Privacy Act basics), which includes the Australian privacy principles (see Australian privacy principles basics) and is supported by Privacy (Credit Reporting) Code 2014 (Version 2) (see Credit reporting basics).

For legal practitioners who advise Australian credit licence (commonly referred to as ACL) holders such as licenced credit providers (commonly include banks and financial institutions) and credit assistance providers (commonly include mortgage brokers and finance brokers) should be familiar with the National Consumer Credit Protection Act 2009 (Cth) (NCCP Act). Among other things, the operation of the NCCP Act affects both providers of credit and consumers of credit. There are specific rules that apply to credit cards, short-term loans, small amount credit contract, and reverse mortgages. For more on the NCCP Act, see What is consumer credit and what credit contracts are regulated by the NCC?

Other than this legislation, there are others that are relevant to banking and finance law and practice. Some may be more front of mind to practitioners, such as the Personal Property Securities Act 2009 (Cth) (PPS Act) that has received much attention since the reform of the law relating to personal property securities (PPS), but some may be less obvious, and an example here is the Electronic Transactions Act 1999 (Cth) (ET Act) that intersects with other banking and finance legislation as transactions now often involve electronic communications.

This subtopic outlines for legal practitioners some key concepts and key definitions of the PPS Act and the ET Act. It also outlines some key provisions of these legislation. Legal practitioners are likely to come across these concepts, definitions and provisions, and it is useful to have working knowledge of them when advising clients.

The guidance note provides an overview of the legal framework and the scope of the legislation, explains real property in the context of the PPS regime, the operation of the PPS Register, and selected key concepts of the PPS Act.

See Legal framework of the Personal Property Securities Act and PPS Act basics.

The guidance note explains what is an electronic communication, provides an overview of the legal framework, explains the key principles of electronic transactions legislation, and outlines the important exemptions that legal practitioners should be aware of. Importantly, this guidance note explains the interaction between the NCCP Act and the ET Act.

See Legal framework of the Electronic Transactions Act and ET Act basics.

In November 2017, the Government announced the introduction of a consumer data right (CDR) in Australia. This guidance note provides an overview of the legal framework and the scope of the legislation and provides a timeline for the implementation of the CDR regime.

See Legal framework of the Consumer Data Right regime.

This guidance note introduces the Banking Code of Practice (BCOP) and explains compliance requirements.

This guidance note also explains selected key provisions of the BCOP, including those relating to account suitability, terms and conditions (and changes to terms and conditions), privacy and confidentiality, financial difficulties, guarantees, electronic communications, and debt collection. It also highlights some matters that legal practitioners should be aware off when advising clients.

See Introduction to and selected key provisions of the Banking Code of Practice.

This guidance note provides guidance and practice tips from selected case law regarding the 2013 BCOP. These cases include:

• •George 218 Pty Ltd v Bank of Queensland Ltd [2015] WASC 434; BC201511125;
• •Doggett v Commonwealth Bank of Australia [2015] VSCA 351; BC201512471;
• •National Australia Bank Ltd v Rose [2016] VSCA 169; BC201605918; and
• •Commonwealth Bank of Australia v Wood [2016] VSC 264; BC201605082.

See Practice tips from selected case law.

This guidance note introduces and explains selected key provisions of the ePayment Code, including those relating to mistaken internet payments, low value facilities, and electronic communications. It also highlights some matters that legal practitioners should be aware off when advising clients.

See Introduction to the ePayments Code and selected key provisions.

This guidance note provides practice tips for acting for subscribers of the ePayments Code. Legal practitioners will find guidance relating to:

• •what to bear in mind when advising subscribers;
• •what to include in subscriber documentation; and
• •what to include in subscriber procedures and processes.

This guidance note also explains how legal practitioners can make use of resources from Financial Services Ombudsman’s (FOS). FOS is one of two ASIC-approved external dispute resolution schemes currently in operation in the Australian financial and credit industries.

See Practice tips for acting for subscribers.

There are a number of codes of practices that have been developed that are relevant to banking and finance law and practice. Codes of practice generally are enforceable rules that sets out an industry’s commitments to deliver a certain standard of practice.

Notably, the codes of practice that have relevance and are important to legal practitioners include the Banking Code of Practice (see Banking Code of Practice) developed by the Australian Bankers’ Association, the Customer Owned Banking Code of Practice developed by the Customer Owned Banking Association (for credit unions, mutual banks and mutual building societies), and the ePayments Code (see ePayments Code) administered by the Australian Securities & Investments Commission (ASIC).

In addition to these codes of practice, there are other formal codes developed by the industry that legal practitioners may find useful. The Mortgage & Finance Association of Australia’s (MFAA) Code of Practice is one such. Legal practitioners who advise the finance broking industry (such as mortgage brokers and finance brokers) should have working knowledge of the MFAA Code of Practice.

The guidance note provides an introduction to the MFAA. It also outlines for legal practitioners some key provisions of the code.

See The Mortgage and Finance Association of Australia Code of Practice.