In response to recommendations made by the Royal Commission for Misconduct in the Banking, Superannuation and Financial Services Industry, the Australian Competition and Consumer Commission has authorised the Australian Banking Association to make certain changes to the Banking Code of Practice.

The ACCC describes this permission as "interim authorisation." In this case it wants to allow banks to agree not to charge "dishonour fees" (charged when a cheque or other form of payment order is dishonoured for insufficient funds) or overdrawn fees or to allow informal overdrafts on basic bank accounts and not to charge default interest on loans secured by agricultural land in drought or "natural disaster declared areas," whatever that jumble of words means.

Interim authorisation, according to the ACCC's website, ought to stop the ABA and the banks that form its membership from breaking Australia's competition laws. It should do so by making them agree to make changes to the Banking Code.

The ABA also intends to amend that code to set something that the ACCC calls "the minimum features" of a basic bank account. While welcoming the proposals overall, some consumer groups have raised some concerns and suggested improvements to the basic banking proposals. The ACCC will consider any submissions that the ABA makes and any changes that the ABA proposes before it decides whether to grant interim authorisation for these basic banking proposals.

“We’re allowing the banks to start making important changes following the Hayne Royal Commission, and for them to start taking steps to ensure they are prepared ahead of a new Banking Code coming into effect next year,” said the ACCC's chairman.

Interim authorisation commences immediately and remains in place unless the ACCC revokes it or the when it completes its assessment of the application for authorisation. The ACCC expects to issue a "draft determination on the ABA’s authorisation application" in September 2019. It hopes that the changes will eventually come into force on 1 March 2020, pending the approval by the Australian Securities and Investments Commission of a second round of changes to the Banking Code that will be separate to this review process.

The ACCC’s decision in relation to interim authorisation permits the ABA and member banks to begin preparations for the implementation of the revised Code next year, and for individual ABA member banks to make changes in accordance with the recommendations of the Hayne Royal Commission. Section 1101A Corporations Act gives ASIC broad discretion to approve, on application, codes of conduct that relate to the activities of Australian financial firms. Approval by ASIC is not mandatory for a code of conduct. The Government believes that such approval might help to make consumers view such a code with confidence, although the Royal Commission's revelations make it unlikely that any pronouncement from ASIC could ever engender such confidence again.