Criminal mortgage lending push in trouble?

Via the AFR comes Labor’s finance spokesman Stephen Jones has torpedoed the scrapping of responsible lending laws:

“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.”

…Centre Alliance senator Stirling Griff said he would consider whether “additional safeguards” were required.

…Independent senator Rex Patrick said he would consider the legislation, but his starting position was that he was not convinced the credit protection law needed to be repealed.

One Nation’s two senators and Tasmanian independent Jacqui Lambie have not settled on a final public position.

The Government will need three crossbenchers to back it which seems a long shot given none of them should.

Recall that victim-witnesses of the Hayne banking royal commission and consumer groups have united to opposition:

The Consumer Action Law Centre, which helped many commission witnesses through the gruelling process, says changing responsible lending laws could lead to trouble.

“The Treasurer’s proposals are a real slap in the face to anyone who gave evidence at the royal commission,” said the centre’s policy director, Katherine Temple.

“The royal commission showed the banks can’t be trusted to do the right thing and these proposals are essentially giving them more power and less responsibilities”…

Recall as well that the announced scrapping of the responsible lending rules directly contravenes the very first recommendation of the Hayne Banking Royal Commission, which only handed down its findings in February 2019:

Remember too that the decision to gut responsible lending laws bypassed Australia’s financial regulators, ASIC and APRA:

Commissioners from ASIC and APRA were questioned about the scrapping of responsible lending laws before a parliamentary committee last week, where they revealed they were given little-to-no notice and were not asked for their views on the decision.

“When was ASIC first informed of the government’s intention to scrap responsible lending obligations?,” Dr Andrew Leigh asked, shadow treasurer for Labor.

“I’m the commissioner with responsibility for credit,” Sean Hughes replied, commissioner at ASIC, “and I was first advised when I read the Treasurer’s media statement through the media on the morning of 25 September.”

“That’s extraordinary,” Dr Leigh replied. “So you got no heads-up … You weren’t asked to provide any advice?”

This decision has all the hallmarks of a grubby deal made between the Morrison Government and its financial and property backers.

I wouldn’t put anything past our parliament but why would cross-benchers back that when credit is clearly flowing just fine, house prices have stabilised in major capitals and are rising firmly elsewhere?

As well, One Nation enjoys bank bashing and the others are more responsible anyway.

Seems unlikely.

David Llewellyn-Smith
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Comments

  1. I dont know about house prices going up ad all being rosy.
    From the back page of the Afr, we hear, it strange times when bankers dont really want your money
    Business doesnt really want to borrow, but so called top rated analysts says go overweight in banks for the first time in 7 years.??
    Meanwhile today in the real world the banks are falling.
    I say, in the real world,punters havent a clue and are running in whatever direcction any witchdoctor indicates.
    To an observer outside the system, it looks exactly like chaos.
    Which I say it is.

    • Geez WW, you really are slipping, aren’t you! This morning you’re all over it blaming the media for Pfizer’s “fake” news on the vaccine yet you missed the most obvious part of your comment about “Business doesnt really want to borrow, but so called top rated analysts says go overweight in banks for the first time in 7 years.??” Where was your call of fake investment advice? In the old days it was called “vested interest”.

    • Goldstandard1MEMBER

      My fin adviser for the first time in 20 years just pulled us out of all funds that are in any of the banks. I thought that was massive because he’s doing it for all his clients.

    • What you don’t understand Ronin is that the world will come to a certain end unless all this extra credit is allowed to flow.

      “Do it for the children!” *Frydatburger wipes away a tear as he clenches an onion in the other hand*

    • This is why I like Jacquie lambie so much. A real person there for the right reasons. The polar opposite to many of the grey careerists in the major parties.

      • Totes BeWokeMEMBER

        She’s great. I’ll be writing to her today to tell her I couldn’t vote for an Independent again if they gave this the green light. She gets a bit bogged down with micro issues but she’s infinitely better than the rest IMO.

  2. Jumping jack flash

    “This decision has all the hallmarks of a grubby deal made between the Morrison Government and its financial and property backers.”

    And for the good health and long life of the New Economy that needs the right amount of debt growth to survive.
    We all saw what happened when the debt growth isn’t good enough. We had a slow but sure contraction over 10 years until the whole place was about to go under. We had businesses going bust on a monthly, if not weekly, basis. We had rampant wage theft just to keep the place alive. Myriad other signs of impending economic doom abounded.

    Then the virus struck and offered the golden opportunity to fix the whole thing. And so they did.
    But for the system to remain fixed we need to make sure that we don’t have the problem of insufficient debt growth ever again.

    The issue is debt eligibility and there’s only a handful of ways to manipulate that. This is one of them.

  3. chuckmuscleMEMBER

    Well APRA rolled back another Hayne recommendation about banker bonuses this week, so why stop there!!!!????!?!?

    F%^k this country and its regulators. BITFD.

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