Banking (consent to assume or use restricted word or expression) No. 1 of 2015
EXPLANATORY STATEMENT
Prepared by the Australian Prudential Regulation Authority (APRA)
Banking Act 1959, paragraphs 66(2)(c) and 66(1)(d)
Acts Interpretation Act 1901, section 33
Subsection 66(1) of the Banking Act 1959 (the Act) prohibits a person who carries on
a financial business, whether or not in Australia, from assuming or using in Australia
a restricted word or expression in relation to that financial business without APRA’s
consent. Subsection 33(3) of the Acts Interpretation Act 1901 confers power to revoke
an instrument made under an enactment.
This Explanatory Statement relates to Banking (consent to assume or use restricted
word or expression) No. 1 of 2015 (2015 Consent), which:

revokes the Consent to Use Restricted Expressions – Class Consent: Building
Societies and Credit Unions and Trustees of Superannuation Entities made by
APRA on 19 May 2000 (2000 Consent), which allowed building societies,
credit unions, and trustees of superannuation entities to use certain restricted
words or expression in the circumstances, and subject to the conditions,
specified in the consent; and

makes a new class consent to building societies, credit unions, related bodies
corporate of a building society or credit union, and certain trustees of
superannuation entities to use the restricted words and expressions specified in
the consent, subject to the conditions specified in the consent.
The 2015 Consent commences on the day that it is registered on the Federal Register
of Legislative Instruments.
1.
Background
Under section 66 of the Act, the use of the following terms is restricted:
•
‘bank’, ‘banker’ and ‘banking’;
•
‘building society’, ‘credit union’ and ‘credit society’;

terms that have been specified in a determination in force under subsection
66(5), such as ‘credit co-operative’; and

any other word or expression that is of like import to any of these terms.
The 2015 Consent updates the 2000 consent, setting out where specified restricted
terms may be used by certain classes of entities and the conditions applying to the use
of those terms.
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Explanatory Statement to F2015L01254
2.
Purpose of the amending instrument
The purpose of the 2015 Consent is to revoke the existing 2000 Consent made on 19
May 2000 and replace it with the new consent.
The 2000 Consent permitted the use of the restricted words or expressions ‘banking’,
‘building society’, ‘credit union’, credit society’ or ‘credit co-operative’ by a building
society or credit union, or a related body corporate of either, in relation to the
financial business of the building society or credit union, as relevant. The 2000
Consent also permitted the trustee of a superannuation entity whose members are
current or former officers or employees of an authorised deposit taking institution
(ADI) to use the name of the ADI in the name of the trustee or superannuation entity
despite the fact that the ADI’s name contains the restricted word or expression ‘bank’,
‘banker’, ‘banking’, ‘credit union, ‘credit society’ or ‘credit co-operative’.
The 2015 Consent continues to permit these uses and, additionally, permits a credit
union or building society, or a related body corporate of either, to use the word or
expression ‘banker’ or ‘mutual banking’ (where applicable) in relation to the financial
business of the building society or credit union, as relevant.
The 2015 Consent allows a credit union or building society to use the words ‘banker’
or ‘banking’ only in marketing and branding material to describe its banking
activities, but not as part of a registered corporate, business or trading name or as part
of an internet domain name.
3.
Consultation
APRA consulted on proposed changes to the Guidelines on Implementation of section
66 of the Banking Act 1959 (the Guidelines) released in April 2013. Comments
received in submissions were considered in finalising APRA’s revised Section 66
Guidelines. The Consent reflects changes made to those guidelines applicable to
credit unions, building societies and trustees of superannuation entities.
The Customer Owned Banking Association (COBA) has expressed the view that the
specification in the revised guidelines that ‘banking’ may not be used as part of a
registered corporate, business or trading name or as part of an internet domain name
by a credit union or building society is a change in policy. In making the 2015
Consent, APRA has sought to clarify, rather than alter, the limits on the use of this
term by aligning the formal instrument of consent with the policy applied by APRA.
The existing Section 66 guidelines specify that banks have been given unrestricted
consent to use the terms ‘bank’, banker’ and ‘banking’. Credit unions and building
societies are restricted to using the term ‘banking’ in relation to their banking
activities. COBA argues that, as all authorised deposit-taking institutions (ADIs)
conduct banking business, all ADIs should be able to use the term ‘banking’ in
registered corporate, business or trading names or as part of an internet domain name.
The restriction ensures that smaller ADIs do not present themselves as banks. While
all ADIs conduct banking business not all are banks.
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Explanatory Statement to F2015L01254
4.
Regulation Impact Statement
A Preliminary Assessment was submitted the Office of Best Practice Regulation who
confirmed that a Regulation Impact Statement was not required.
5.
Statement of compatibility prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011
A Statement of compatibility prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 is provided at Attachment A to this Explanatory
Statement.
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Explanatory Statement to F2015L01254
Attachment A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
Banking (consent to assume or use restricted word or expression) No. 1 of 2015
This Legislative Instrument is compatible with the human rights and freedoms
recognised or declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instruments
Banking (consent to assume or use restricted word or expression) No. 1 of 2015
revokes the existing Consent to Use Restricted Expressions – Class Consent: Building
Societies and Credit Unions and Trustees of Superannuation Entities made on 19 May
2000 and replaces it with a new consent. The new consent allows credit unions and
building societies (and their related bodies corporate) and trustees of certain
superannuation entities to use certain words and expressions that are restricted under
the Banking Act 1959, such as ‘banker’, ‘banking’, ‘building society’ and ‘credit
union’.
Human rights implications
APRA has assessed this Legislative Instrument and is of the view that it does not
engage any of the applicable rights or freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011. Accordingly, in APRA’s assessment, the instrument is
compatible with human rights.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any
human rights issues.
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Explanatory Statement to F2015L01254