“The Morrison government’s changes to this legislation will simplify Australia’s credit framework, ensuring consumers and small businesses have quick access to credit as the economy continues to recover from the COVID crisis,” Frydenberg said in a press release.
“The reforms aim to improve efficiency, reducing the time and costs associated with providing credit to consumers and small businesses. They also strengthen protections for higher risk products and vulnerable consumers by using low-value credit contracts and consumer leases. “
As part of this plan, banks and some non-bank lenders will be subject to less prescriptive prudential lending standards which are currently overseen by the Australian Prudential Regulation Authority.
The oversight of payday lenders for vulnerable borrowers by the Australian Securities and Investments Commission (ASIC) will be strengthened. The current responsible lending laws were introduced by Labor in the wake of the global financial crisis.
Mr Frydenberg said laws too often cause delays in obtaining credit for consumers, which could hamper their purchasing decisions.
“It is now more important than ever that our economic recovery is not held back by unnecessary obstacles to the flow of credit to households and businesses,” he said.
“The government will continue to work cross-bench on these reforms to help secure Australia’s recovery.”
Groups such as the Council of Small Business Organizations of Australia, the Australian Banking Association and the Housing Industry Association are supporting the plan.
The plan addresses the concerns of the Big Four and Reserve Bank of Australia Governor Philip Lowe, who after Kenneth Hayne’s Royal Commission of Inquiry and ASIC’s prosecution of Westpac in the “shiraz and wagyu” loans, banks have become too conservative and have reduced the flow of credit. .
A Senate vote has been postponed until June over concerns over fragile support.
Senator Hanson has been scathing this week. Senators will not vote on a bill until mid-June, with two weeks of Senate Estimates hearings starting Monday.
“The government is almost giving the big banks carte blanche and allowing them to self-regulate using their own weak and selfish code of conduct that does not offer strong consumer protection or responsible lending arrangements,” she said. declared.
“This government says ‘don’t worry you can trust the big banks’, but I say millions of Australians should not be exposed to predatory banking practices.”
Labor spokesman for financial services Stephen Jones called on the government to abandon its plan, calling the legislation a “political orphan”.