Australian gov't announces initiative on banking reform

Australian federal Treasurer Wayne Swan on Sunday announced an initiative on bank reform, in a move to make Australia's banking more competitive. Swan said the change include allowing dissatisfied customers to switch banks more easily by signing just one form. He said the new "tick and flick" service would remove the burden of having to change the details of automatic debit and credit transactions. Instead, customers would no longer need to inform their old bank of their intention to leave, rather the customer will approach the acquiring bank with their intention to switch, and sign only one form that authorizes their new financial institution to do all the work for them. "This initiative will give consumers the power to easily switch to another bank, building society or credit union if their existing institution isn't providing good value and service," Swan said in a statement released on Sunday. "It will take the headache out of switching bank accounts, encouraging consumers to seek out the best deal on their savings." Swan said the government will establish a Treasury-led working party to finalize the details of the new service to be introduced on July 1, 2012. In another change, a new National e-Conveyancing System (NECS) which will act as a single online portal for property transactions in Australia, in a move to make refinancing a home loan cheaper and easier. "This will help reduce the costs associated with loan applications, property valuations, settlements, property title searches, and registering mortgages. These costs can add up to as much as 6,500 U.S. dollars every time a borrower switches mortgages," Swan said. The federal government was working through the Council of Australian Governments to introduce NECS in early 2013. Swan also announced on Sunday the introduction of a mandatory one-page fact sheet to help consumers understand the costs and benefits of lenders' mortgage insurance when they take out a home loan. He said the aim was to allow consumers to compare quotes side- by-side, including the difference in premiums and rebate schedules.