Building societies, credit unions, and their industry Special Serivices Providers (SSPs) will be allowed to issue cheques in their own name under draft legislation released today by the Treasurer, the Hon Peter Costello.

Releasing the exposure draft of the Cheques and Payment Orders Amendment Bill 1998, the Treasurer said that the reforms will encourage competition in the provision of financial services to the community, and enhance the efficiency and usefulness of the cheque as a financial product in the range of services offered by the financial industry to the community.

Under the exposure draft, customers of building societies and credit unions will be able to draw cheques on their own financial institution or on their institution’s SSP, instead of on a bank through agency cheque arrangements as at present.

“The reforms will provide building societies and credit unions with greater flexibility in the cheque clearing process, reducing costs and leading to cheaper financial services”, the Treasurer said.

“The amendments to the Cheques and Payment Orders Act proposed by this Bill will provide consumers with greater freedom of choice in choosing a financial institution, as products offered by building societies and credit unions will now be more comparable with those offered by banks, the Treasurer said.

“In addition, it will be clear to consumers which financial institution stands behind a cheque”.

The draft Bill also proposes the repeal of little-used provisions for payment orders, and makes a number of miscellaneous amendments to improve the operation of the Cheques Act.

Comments on the Bill are invited by 11 March 1998. Copies of the exposure draft Bill and commentary are available from Brenda Berkeley, Department of the Treasury,

telephone (02) 6263 3972, Commonwealth Government Infoshops, or on the Treasury web site.

CANBERRA

12 February 1998

Media contact: Brenda Berkeley – Department of the Treasury – (02) 6263 3972