Dear Australian Parliamentarians,
The Federal Government has announced plans to axe safe lending laws – essential consumer protections designed to protect ordinary people from the sorts of terrible lending practices we saw during the global financial crisis and banking royal commission.
We are calling on you to stand up for Australians and block this harmful law when it is introduced into Parliament.
People will be worse off. When people are given loans or credit cards they can’t afford, the human cost is high. The banking royal commission heard shocking stories of banks giving aged pensioners 30-year mortgages, relying on fraudulent loan documents provided by car dealers, and paying thousands in kickbacks to loan ‘introducers’. We’ll see even more of this if banks and other lenders are not legally required to take care when lending.
This will lead to a debt disaster. We are experiencing our first recession in nearly 30 years and high levels of household debt will slow down the national economic recovery. Australia already has the second highest level of household debt in the world. Banks and other lenders should not be given a green light by the government to burden people with even more debt and trap households in a cycle of persistent debt.
This change would contradict the very first recommendation of the banking royal commission. Commissioner Kenneth Hayne called for safe lending laws to be enforced, not dismantled.
We write to you as community organisations, financial counsellors, and thousands of people concerned about the government’s disastrous proposal. This policy will hurt people and hinder our economic recovery. These changes will take away people’s rights and give more power to the banks.
If this law is passed, people will be left to pick up the pieces for years to come while banks and other lenders are given a blank cheque to profit from aggressive lending. We need you to stand up for our community and protect safe lending laws.