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Launched in September 2025, the AFIA Code of Practice, or simply the Code, sets standards for its members surrounding customer service, ethical behaviour, responsible lending, supporting financial hardship, complaints handling, and transparency across the finance industry.
Other non-bank members include Angle Finance and Auto Finance, Prospa, MoneyMe, RedZed, Resimac, Shift, NOW Finance, and Pepper Money, which was the first non-bank signatory back in February.
The Code will take effect from 1 October 2026, following a transition period allowing members to align their systems, policies, and practices with the new standards.
Stronger support for customers
Mark Jones, CEO of Bluestone Home Loans, said the Code would help uphold responsible values in the non-bank sector.
“The Code provides an important framework for ensuring customers are treated fairly and consistently throughout their lending journey. We are proud to join fellow industry participants in upholding these principles and helping to build greater trust and confidence in the non-bank lending sector,” Jones said.
As listed by AFIA, consumers will benefit from the Code through:
- Confidence that AFIA members are putting customers first and are truly customer-centric: Clear standards of conduct and disclosure that support good customer and industry outcomes.
- Clear communication and transparency: Simple, customer-friendly information about products, terms, and fees.
- Increased protection from scams and fraud: Clear rules on scam prevention, information and data protection, and privacy and security measures.
- Responsible use of technology and AI: Ensuring industry innovation is balanced with safeguards.
- Support for customers: Stronger obligations to assist people experiencing financial hardship or small businesses dealing with financial difficulties and a commitment to help prevent the misuse of products to inflict harm on another person.
- Access to dispute resolution: Prompt and efficient complaint handling and external mechanisms if complaints cannot be resolved directly with their finance provider.
Growing role of non-banks
The introduction of the AFIA Code comes as non-bank lenders continue to expand their presence in Australia’s credit market.
According to Australian Bureau of Statistics (ABS) Lending Indicators, the value of new home loans written by non-bank lenders rose 65.2 per cent year on year to $10.49 billion in the June 2026 quarter.
By comparison, lending by major banks and other ADIs increased by just 2.6 per cent to $87.61 billion over the same period.
Non-banks now account for 10.7 per cent of new home lending by value, up from 4.8 per cent when the ABS series began in 2019.
That growing market share is also reflected in the lending volumes and performance reported by the industry itself. AFIA’s inaugural Residential Mortgage Non-Bank Lenders (RNBL) report, published in December 2025, found that non-bank lenders helped 51,000 Australians purchase a home during the 2025 financial year, with surveyed AFIA members providing $72.2 billion in home loans.
The report also found that early-stage arrears among non-bank lenders remained relatively low, at 0.67 per cent compared with 0.58 per cent for major banks, while 90-plus-day arrears were lower for non-banks, at 0.81 per cent versus 1.10 per cent for major banks. More than 80 per cent of hardship applications received by residential mortgage non-bank lenders were approved.
Non-bank lenders operate as licensed credit providers and are subject to consumer credit regulation administered by multiple regulators, including the Australian Securities and Investments Commission (ASIC).
Banking Code review kicks off
The Australian Banking Association (ABA) has also announced an independent review of the Banking Code of Practice, with former ASIC deputy chair Peter Kell appointed to lead the five-yearly review.
The Banking Code sets standards for customer service and provides protections beyond existing laws for individual and small-business customers, as well as guarantors.
The review will include public consultation with customers, consumer and small business groups, industry, and other stakeholders.
ABA CEO Simon Birmingham said the review would provide an opportunity to assess how the Code is operating and whether its standards remain fit for purpose.
“The Code helps ensure that when customers go about their banking, they can have confidence they are receiving the highest level of service and care,” Birmingham said.
“Banks take their obligations under the Code extremely seriously. It is the only industry code approved by ASIC and it sets a high bar for how banks interact with their customers.
“This review is a chance to have a look at how the current Code is operating, hear the views of stakeholders and further strengthen standards for customers where necessary.”
Consultation is expected to begin in October, with an interim report due in March 2027 and the final report, including findings and recommendations, expected in June 2027.
[Related: ATO debt and SMSF changes present untapped opportunities for brokers: Bluestone]
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