Why the measures are needed
ASIC Corporations (COVID-19 – Distribution of Debit Cards) Instrument 2020/401 is aimed at alleviating the impact of COVID-19 lockdown restrictions (eg difficulties with accessing bank branches to withdraw funds) on consumers who are reliant on cash to make purchases of goods and services by making it easier for authorised deposit institutions (ADIs) to provide them with debit cards.
Details – the measures are limited and conditional
Broadly, ASIC Corporations (COVID-19 – Distribution of Debit Cards) Instrument 2020/401 temporarily:
- relaxes hawking requirements in s922A of the Corporations Act 2001 (Cth) (the Act) to enable ADIs to offer to provide eligible existing account holders with debit cards through unsolicited meetings at a bank’s place of business, or through unsolicited telephone calls. This means that if one of an ADI’s existing customers without a debit card is in a branch, the ADI may offer to issue that person with a debit card to ensure they can access their funds during the COVID-19 outbreak. The offer may be for a debit card to access an existing basic deposit product, or for a new basic deposit product and a debit card to access that new product. The explanatory memorandum states that though some ADIs may contact customers to offer to provide them with a debit card, due to the volume of customers involved, others may distribute debit cards to customers by mail without prior contact.
- relaxes product disclosure requirements in Part 7.9 of the Act, to allow the ADIs to comply in relation to basic deposit products, linked non-cash payment facilities and debit cards by providing the information they typically provide with the debit card that is mailed to the eligible account holder.
Consultation
According to the Explanatory Memorandum, before making this Instrument, the Australian Securities and Investments Commission (ASIC) engaged with a targeted range of stakeholders including relevant industry associations and consumer representatives to discuss the proposals and a 'broader range of stakeholders was involved in the design and development of the proposals made possible by the Instrument'.
Announcing the measure Australian Banking Association CEO Anna Bligh said that the ABA and industry had taken a proactive approach to the issue. 'The industry has recognised that as a result of the government’s social distancing advice, particularly for older Australians, we must provide additional options for people to do their banking and pay for goods and services...The industry thanks the regulators, in particular ASIC, who have provided the approvals needed on this record-breaking project quickly and efficiently' Ms Bligh said.
Temporary measures only
The Instrument commenced on 25 April and will cease to apply on 30 September 2020.
Australian banks will issue half a million cards in the next few weeks
In a statement, the Australian Banking Association said that, over the next few weeks, banks will issue a record number of debit cards (Mastercard or VISA debit) to the 500,000 customers who don’t have them (most of whom 70 years of age or older) to ensure that they are able to pay for their goods and services online or over the phone throughout the COVID-19 pandemic.
The statement confirms that the cards will incur no additional cost to any customer and that bank staff will be on hand to provide practice advice to those unfamiliar with how the cards work
Australian Banking Association CEO Anna Bligh said this was an important step in ensuring no one was left behind when it comes to banking services, regardless of the level of lockdown a community is experiencing because of the COVID-19 health crisis.
The Council of the Ageing has welcomed the measure
Council on the Ageing (COTA) Chief Executive Ian Yates welcomed the measure, and thanked 'all banks involved for stepping up to take care of their more vulnerable customers in this time of need. We welcome ASIC’s flexibility in permitting these offers to happen'.
