Choice says it particularly welcomes several proposals aimed at putting power and money back in the hands of consumers.
This includes mandatory fact sheets for people looking for a home loan, a ban on mortgage exit fees, and transferability of lenders' mortgage insurance.
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Choice says it also approves of the fast-tracked credit card reform legislation and a review of ATM fees.
Choice's banking campaign director Richard Lloyd said the government had shown it had listened to consumers.
"This is a good way to level the playing field," Mr Lloyd told reporters in Sydney on Sunday.
"Done the right way these proposals could mark the start of a major shift in banking, placing more power in the hands of consumers."
Exit fees, which can run into the thousands, will be banned from July 1, 2011.
The Australian Competition and Consumer Commission (ACCC) will also be given the power to investigate price collusion among banks.
"How this (the ACCC power) will actually work in detail will be quite tough but, again, we'll work with the government and the regulators on trying to get that right."
The Choice campaign for better banking would continue, Mr Lloyd said.
The federal government has also pledged to spend another $4 billion on residential mortgaged-back securities to smaller lenders, taking to $20 billion its investment in non-bank players since the onset of the global financial crisis.
