Changes to Australian Credit Laws

The Australian Banking Association has welcomed proposed changes to the nation’s consumer credit laws.

“It is important to ensure that these changes strike the right balance between maintaining strong consumer protections while providing credit into the economy at a critical time”, said Australian Banking Association Chief Executive Officer, Anna Bligh.

“Banks look forward to working with the Government to ensure the legislation works for both customers and the broader economy”.

The Banking Royal Commission identified the need to simplify the regulatory landscape. This proposed reform removes duplication and overlap between regulators while continuing to ensure strong protections for consumers.

“Australian banks understand their role in supporting customers and rebuilding the economy. Ensuring the flow of credit to families and businesses, with the right customer protections, is paramount”

ABA CEO Anna Bligh

“Australian banks understand their role in supporting customers and rebuilding the economy. Ensuring the flow of credit to families and businesses, with the right customer protections, is paramount”, Ms Bligh said.

Australian banks remain committed to strong protections for consumers. Under the Government’s proposal banks will continue to be subject to strong regulation, including the conduct requirements of the National Consumer Credit Protection Act, APRA lending standards and the Banking Code of Practice, together with the important role of the Australian Financial Complaints Authority.

With the right balance, these changes will simplify lending rules while maintaining strong protections for borrowers and improving protections for those vulnerable consumers using debt management firms, small amount credit providers and consumer leases.

The ABA welcomes the further protections for customers accessing small amount credit contracts and consumer leases. Australians facing financial difficulty will welcome the strong new protections against the unscrupulous practices of some debt management firms. In some cases, these firms prey on people at their most difficult time and their actions can leave them worse off.

Australian banks will work with the Government and regulators in the months ahead on the detail of the proposed changes.

Anna Bligh