The Federal Government wants to axe new responsible lending laws amid the COVID economic downturn but it might have a tough time getting it through the Senate.
The Consumer Action Law Centre has rounded up a set of letters written to the Treasurer from banking royal commission victims urging him to retain the new laws.
Labor has jumped on the letters to Josh Frydenberg, with financial services spokesman Stephen Jones telling him to listen to the victims who had laid bare their sad stories.
“The government should back out and reach out to Labor on a sensible agenda,” he told Australian Financial Review.
“If there are serious issues about the flow of credit, we’re willing to look at it but rolling back consumer protection is a no-go zone.”
Under the plans, banks and non-bank lenders will be policed under less prescriptive prudential lending standards by APRA and the stricter responsible lending rules from ASIC will be scrapped.
The changes look set for a tough time trying to get through the Senate with Labor and the Greens looking to oppose them.
To get it across the line, the government would need the green light from at least three of the five Senate crossbenchers.
Australian Banking Association CEO Anna Bligh supports the plan, saying the process of getting loans since tighter restrictions came in had become painful.
“With the right consumer protections in place, this reform will be a positive step for the Australian economy,” she told AFR.
“Two different regulators, and hundreds of pages of rules and guidance have complicated the intent of the original legislation.
“A simpler system means a faster, less complicated process for customers.”