With thousands of Australian families currently experiencing financial distress, the new Mutual Banking Code of Practice has been developed by industry body Abacus – Australian Mutuals. Under the new Code, credit unions and mutual building societies make a clear commitment to responsible lending - well ahead of the proposed federal credit legislation and well ahead of any commitments being considered by other lenders.

The new Code of Practice has been designed to help you easily understand our products and services and outlines 10 key promises to ensure that all credit unions and mutual building societies will be fair and ethical when dealing with you. 

The 10 key promises are that we will:

1. Be fair and ethical in our dealings with you
2. Focus on our members
3. Give you clear information about products and services
4. Be responsible lenders
5. Deliver high customer service and standards
6. Deal fairly with any complaints
7. Recognise member rights as owners
8. Comply with our legal and industry obligations
9. Recognise our impact on the wider community
10. Support and promote this Mutual Banking Code of Practice. 

 Our responsible lending practices

• We will always act as a responsible lender.
• We will base our lending decisions, including decisions to extend existing credit facilities, on a careful and prudent assessment of your financial position. We will periodically review our credit assessment procedures and criteria for the products we issue.
• We will generally only lend amounts to you that we believe, on the information available to us, you can reasonably afford to repay. However, different criteria will apply in the case of some products, such as bridging finance arrangements.
• We expect you to provide honest and accurate information to us when applying for a loan or the extension of a credit facility. However, where it is prudent to do so, we will also undertake our own independent checks.
• We will promote the responsible use of credit to our members and customers using a range of approaches.

Credit limit increase offers

• If we issue a credit card or other revolving credit facility, we will act responsibly in setting and increasing the amount of credit we make available to you. We will not send you an unsolicited offer to increase your credit limit if you have a recent poor repayment history, or we are aware of other circumstances that make it imprudent for us to extend further credit to you.
• We will ensure any unsolicited offer we make to you to increase your credit limit on a credit card or other revolving credit facility that we issue includes information on: the new minimum payment required, options for lowering existing or new credit limits, not accepting the offer if you cannot afford further credit, you are currently having difficulties meeting your repayments, or your financial circumstances are likely to deteriorate in the near future and how to tell us if you do not wish to receive offers to increase your credit limit in the future.

If you are in financial difficulties

We will work with you in a constructive way if you experience genuine difficulties meeting your financial commitments. With your agreement and commitment, we will try to assist you to overcome those difficulties. We will do this whether or not you have a right to seek a hardship variation or change under consumer credit laws.

We will have procedures in place to ensure we:

• Adhere to hardship variation or change provisions of consumer credit laws
• Respond promptly to any request or application made to us (we may also initiate contact to discuss your financial situation)
• Genuinely consider your application or request, taking account of your situation. However, we will only be able to do this if you provide us with the financial information and documents we may reasonably need to assess your situation for ourselves
• Encourage you to keep making whatever payments you can while we are considering your request
• Consider longer term as well as short-term financial issues when they are relevant. If you are experiencing longer term difficulties, we will try to develop an appropriate solution with you to allow you to meet your obligations
• Not list your default on your credit reference file while we are considering your application or request
• When you have made an application or request in respect of a debt, not sell that debt to a debt buy-out business while we are still considering the application or request
• Suggest other options or avenues that may be available to you, if we are unable to agree to your application or request
• If we agree on a plan to assist you, summarise this in a letter to you
• If we are unable to assist you, advise you promptly in writing, and
• Refer you to a financial counselling or similar service in appropriate cases (subject to availability).