The repeal of safe lending laws rests in the hands of the Senate crossbench with a vote expected on the repeal of safe lending laws as early as next week. Over 33,000 Australians have called for the laws to be protected in an open letter: http://choice.com.au/safelending.
Consumer groups respond to the Senate report on safe lending laws available here.
Quotes attributable to Alan Kirkland, CEO of CHOICE
"This report ignores the clear economic evidence: that the housing market is already overheating and removing safe lending laws will push home ownership out of reach for many more Australians.
"We already see high levels of mortgage stress in states like Queensland, South Australia and Tasmania. Giving more power to the banks in these circumstances will be bad for people who are already struggling to repay their mortgage and bad for people trying to get into the housing market.
"We hope that the rest of the Senate will see beyond the political spin and focus on the evidence: that we need safe lending laws now more than ever."
Quotes attributable to Gerard Brody, CEO of Consumer Action Law Centre
"One bad loan won't break the bank, but it can definitely break the borrower. That's why we need to keep our safe lending laws – without them, the regulator focus will be on the stability of banks, not the protection of borrowers.
"This Bill will abolish a borrower's right to legally challenge a lending decision, and will remove the role of ASIC in overseeing most bank lending. This directly contradicts the Banking Royal Commission which said that the existing law should not only remain but be better enforced.
"The Government's plans will dismantle our effective and sound financial services regulatory framework. The reality is that the prudential regulator, APRA, does not provide individual consumer protection. It focuses on whether loans cause a credit risk to the bank, not on whether loans are affordable to individual borrowers."
Quotes attributable to Karen Cox, CEO of Financial Rights Legal Centre
"Safe lending laws in this country were carefully crafted in response to real harm from unchecked lending. The Royal Commission reinforced the need for them only two years ago. This bill will take consumer protection backwards by a decade, let the banks off the hook again and expose ordinary Australians to more crippling debt.
"This plan to roll back responsible lending was concocted as a knee jerk response to the pandemic related recession. Now we are facing record lending levels and runaway property prices. It's time to drop this crazy plan and avert a potential debt disaster.
"The provisions in the Government's Bill which claim to improve protection for vulnerable people against predatory lenders have been watered down to be worse than the law as it stands. This part of the Bill is not going to work and as Government subsidies end, the sharks are already starting to circle."
Quotes attributable to Fiona Guthrie, CEO of Financial Counselling Australia
"The majority report is so disappointing and largely ignores the plight of people who have been harmed by irresponsible lending."
"The effect of irresponsible lending on everyday people is enormous; it sends too many people into debt spirals which often leads to financial stress, family breakdown, mental health issues and even homelessness.
"We're pleading with Senators, especially the crossbenchers, to block this bill. Please, don't make it harder for financial counsellors to help the most vulnerable people."
CHOICE, 0430 172 669, email@example.com
Consumer Action Law Centre, 0413 299 567, firstname.lastname@example.org
Financial Rights Legal Centre, 0414 729 006, email@example.com
Financial Counselling Australia, 0418 334 121, firstname.lastname@example.org