Banking Recap No RBA Cuts, Changes in Credit Report, and More

Banking Recap: No RBA Cuts, Changes in Credit Report, and More

SYDNEY, Australia – This week in banking news showed that interest rates are still on hold as there are no expected rate cuts from the Reserve Bank of Australia (RBA).

Starting early in the week, the question of whether the central bank will go for a rate cut has been floating in the market a lot. Now, results are in, and the RBA has decided to keep that current interest rate as-is for the fourth consecutive month. The interest rate will remain at 0.75%.

The main reason for the central bank to forgo a cut was explained by Philip Lowe, the Reserve Bank Governor. He said that the unemployment rate in the country went down to 5.1% from its previous 5.2%, and the CPI data is better than expected.

Although Lowe admitted that current figures on the unemployment rate and CPI figures are not suggestively strong, he stated that the optimism had eased the pressure as well as the urgency for another rate cut from the RBA in February.

While the official cash rate will remain at 0.75%, which is a record low after the recent RBA meeting, Peter Marshall, a banking expert, said that a possible first-rate cut this year is looming shortly. He said that there are currently still a lot of issues in the country’s economy, especially the coronavirus outbreak that has caused a massive impact on education and tourism, affecting a huge part of the economy as of late.

If the official cash rate experiences its first cut in a couple of months from now, the recent drops in a savings account, term deposit, and home loan rates are expected to continue throughout the year. Meanwhile, the saver’s interest rates have remained going down. Based on the Mozo database, the current savings account rate is averaged at 0.98%.

On the other hand, there are current credit reporting changes that could be beneficial for everyone trying to get their loans approved. Getting a personal loan, home loan, and business loan are expected to become more convenient and quicker for Australians starting February 14, 2020.

The easier process of getting a loan is possible with the recent changes made to the current standards for credit reporting. Come February 14, civil court filings will not reflect on the credit score any longer.

The revisions to the Credit Reporting Code of 2014 was recently approved by the Office of the Australian Information Commissioner (OAIC). The amended code outlines that summons and writs will cease to be considered as public information. They will now be removed from the credit report of every person.

Before the code amendments, credit scores show claims filed against an individual, which often puts a hit to the credit score, even if the claim hasn’t made it to court. It has been a major cause of frustration to a lot of people who are either rejected outright or finding it difficult to negotiate on the interest when applying for loans.

According to Graham Doessel, CEO of MyCRA Lawyers, thousands of Australians have tainted credit ratings with their financial security destroyed due to civil court treating them as guilty until they have proven their innocence when it comes to their credit rating. Fortunately, that will change very soon.

The new legislation will be appreciated with everyone trying to get their loans approved, as well as for mortgage brokers who usually experience the back foot when trying to negotiate loan deals for their clients who have their credit scores put in jeopardy due to trivial court judgments.

Starting February 14, only claims that have resulted in judgment will reflect in someone’s credit score. Also, it will not affect the credit score of the person unless it is credit-related. Credit scores that have been previously tainted judgments that are non-credit related, such parts should be removed automatically by mid-February.

On the other hand, the new accessibility kit from UBank is expected to revolutionize not only their application but their digital banking all over the world as well.

UBank has been a popular online bank, and earlier in the week, it has introduced its latest Accessibility Kit. The kit was designed to offer more accessible banking to everyone, both its app users as well as their users from around the world. For a lot of Australians, checking bank balances, depositing to the savings account, or making transfers have become a daily banking habit. But more than the currently available banking apps, this new Accessibility Kit will make mobile banking even more convenient and accessible to all.

The Accessibility Kit can be downloaded and available for any app developer. Once it is downloaded, it will audit the app automatically and flag all potential accessibility problems. UBank also hopes that the Accessibility Kit will be useful for people with motor, cognitive, and visual-auditory disabilities. Also, the bank aims for the Kit to prove app developers with a definitive guide when it comes to their accessibility tools upgrade.

Peter O’Malley, Chief Product Officer of UBank, said that he wishes that the new technology will start discussions between the teams that are planning to build applications to make digital accessibility a common part of the entire app building process.

Meanwhile, Australian retailers have started to raise the flag against credit card providers and big banks this week, especially those that are giving them the pointless tap and go fees, which mainly affects small businesses.

Overall, these fees are taking around $550 million from the pocket of the retailers every year. It is because if the tap and go transactions that are usually processed automatically using payment networks, including MasterCard PayPass and Visa payWave.

One group of several massive retailers, Fairer Merchant Fees Alliance, stated that their payment networks have become pricier. They said that such payment systems charge them fees that are often four times higher compared to debit payment networks like EFTPOS. According to them, the fees are around 40c added on the $100 card transaction fee.

And while the 40c is a significantly low amount, retailers shed out a heaping $350 million to $550 million for these extra costs every year. Some of these unnecessary costs are also often passed to the customers as high price tags and surcharges.

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