Letter to AFR editor in response to "Pull lending laws into line with 'wagyu and shiraz'"
By Karen Cox
The editorial “Pull lending laws into line with 'wagyu and shiraz'” is factually inaccurate and grossly overstates the case for dismantling Australia’s world-leading safe lending regime.
The claim that axing responsible lending laws will pull them into line with the Wagyu and Shiraz case is ludicrous; this case is the Federal Court’s interpretation of the law as it stands.
To suggest lenders have “hundreds of pages of complex and costly guidance” and that regulators are unnecessarily tying their hands is misleading when in reality banks have actively and repeatedly sought ASIC’s guidance.
It is also inaccurate to say that Hayne’s criticism of financial regulators' prompted ASIC’s “kneejerk” clampdown on responsible lending. ASIC announced proceedings against Westpac months ahead of the Royal Commission.
To state that the Royal Commission “found no evidence of widespread irresponsible lending” is simply erroneous. The Commission’s many revelations included that the banks paid out more than $700 million in remediation for bad consumer loans. The National Australia Bank’s dodgy loan scheme alone affected 2300 people and families.
Buyer beware is a dangerous principle to guide our economy and lending amidst a recession.
Putting to the side that safe lending does not apply to small businesses, data indisputably reveals our current lending laws are not “crimping bank lending and holding back the recovery.”
Australian Bureau of Statistics data for October shows record high new housing loans.
Financial Rights sees the ramifications of bad loans and devastation for individuals and their families, every day.
This proposal removes key rights for borrowers, leaving them at the mercy of hard-sell practices exposed by the Royal Commission.