- Data recorded from November 2018 to December 2020
- CHOICE CEO says the banks are yet to 'clean up their act'
- He fears the lending law amendment could increase unaffordability
According to an analysis by CHOICE, since the end of the Banking Royal Commission hearing, over 31,000 complaints have been made by consumers regarding credit products.
The analysis comes just as the Senate is considering relaxing responsible lending laws that were implemented by the Rudd Government during the aftermath of the Global Financial Crisis.
The Federal Government has argued that the National Consumer Credit Protection Act is too prescriptive and could affect Australia’s post-pandemic recovery. By relaxing these rules, it hopes more loans will be taken out which it says will facilitate economic growth.
CHOICE reviewed data collected by the Australian Financial Complaints Authority (AFCA) from November 2018 to December 2020. Complaints included irresponsible lending, incorrect charges, fraud alongside unfair terms and conditions.
Alan Kirkland, CHOICE’S CEO, says the sheer volume of complaints show that the banks are yet to ‘clean up their act’ despite the Royal Commission’s findings. He is fearful of what damage could be done by relaxing the lending laws.
“Repealing safe lending laws is an extraordinary thing to do when many Australians are struggling in the wake of COVID-19.”
“If passed, this will be the biggest handout to the banks we’ve seen in decades.”
This is a time for the Senate to do what it was created to do – temper the influence of lobbyists and make sure Australians are put first.”
Alan Kirkland, CHOICE CEO
Complaints were universal with even affluent harbourside suburbs in Sydney filing complaints to the AFCA.
Mr Kirkland added ABS data is showing that mortgage lending is at record highs, fueling his concerns about proposed changes.
“This is fuelling a housing boom that is pushing home ownership out of reach of many more Australians. Scrapping safe lending will land many people with large debts they can’t afford and take away their ability to receive justice.”
“This contradicts the very first recommendation of the Banking Royal Commission – to leave safe lending laws intact.”
Alan Kirkland, CHOICE CEO
