ABOUT THE ISSUE

While our communities face reduced income support, impending financial ‘cliffs’ as loan deferrals come to an end and uncertain economic times, the Government has used COVID-19 as a cover to axe our responsible lending laws. 

These laws were introduced following the Global Financial Crisis to help level the playing field between individuals and lenders. The reforms provided critical consumer protections that deterred lenders from providing unaffordable and unsuitable loans, and offered redress for people when those laws were breached.

The strength of our lending standards is one of the reasons our economy has been able to withstand record high levels of household debt. Repealing these protections in the midst of a recession is madness. 

Banks, lenders and brokers should be working to support their customers and communities to get through this pandemic. Instead, it seems they are more interested in lobbying to undermine our responsible lending laws and boost their bottom lines.

After saying all the right things after the Financial Services Royal Commission (FSRC), the Government and industry lobbyists are attempting to turn their backs on Commissioner Hayne’s recommendations. Indeed, the very first recommendation in the FSRC Final Report was to not amend our credit laws (Recommendation 1.1). 

The dangers of irresponsible lending to individuals, families, communities and the economy is clear. We cannot allow the Government to axe our responsible lending laws.  

Click here to read a detailed briefing about the issue.