The banking association has launched a financial assistance hub for those needing advice on repaying their mortgages, personal loans, credit cards, business loans or agribusiness finance.
The Australian Banking Association (ABA) has launched a new platform aimed at providing assistance for bank customers needing additional support to manage their finances as repayment deferrals come to an end.
The Financial Assistance Hub – hosted on the ABA website – aims to act as a guide to customers in financial hardship and answers commonly asked questions regarding repayments and what steps they can take if they are finding it hard to manage their debt burden.
By selecting which financial hardship situation applies to them (for example, if they’ve missed repayments or are worried that they may miss them), the customer can read tailored information to help them take the next steps.
The hub also provides links to financial counselling and support, with access to relevant hotlines and resources.
It has been launched ahead of the 31 March 2021 expiry for the COVID-19 deferred repayment support packages and was developed in collaboration with the Australian Securities and Investments Commission (ASIC), the Australian Financial Complaints Authority (AFCA), the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) and consumer groups, including Financial Counselling Australia and the Rural Financial Counselling Service.
Speaking of the launch of the new hub, ABA CEO Anna Bligh commented: “This is about ensuring that no customer is left in the dark as we emerge from the pandemic. It represents a compact between banks and their customers as we navigate the uncertain path ahead.
“Customers can expect a thoughtful and compassionate approach, with clear and transparent explanations, regardless of who they bank with. This step-by-step guide will help customers navigate the path out of the pandemic,” she said.
The ASBFEO Kate Carnell commented: “This initiative by the ABA shows the banks are taking proactive steps to assist small businesses experiencing financial hardship.
“With government support measures including JobKeeper set to end next month, the number of small businesses in financial hardship is expected to rise.
“The financial assistance hub can help struggling small-business owners who are unable to meet reduced payments or restructure their loans find a tailored solution,” she said.
Ms Carnell added: “I congratulate the ABA for taking a compassionate approach as small businesses try to get back on their feet.
“Small businesses under financial strain should make use of this supportive online tool.”
Hardship assistance teams being formed
According to the ABA, as at 31 January 2021, 91 per cent of deferred loans at the largest banks had resumed repayments. Approximately 5 per cent of deferred business loans and 13 per cent of deferred housing loans are yet to resume repayments.
Ms Carnell noted that while it was “good news” that 91 per cent of deferred loans have resumed repayments, there were still a number of small businesses “hurting out there”.
“More than 11,000 business loans remain deferred, and we know there were 493,000 businesses still receiving JobKeeper in December 2020,” the ASBFEO said.
The ABA said that banks would be working directly with those in hardship on an individual basis to find a way forward, with specialised hardship teams being set up for customers who are unable to make reduced repayments or restructure their loans.
“Every customer is different. Banks are taking a careful and measured approach that takes into account every customer’s individual circumstances.
“Australian banks will continue to help customers and businesses turn the corner after the pandemic, while providing a fair and compassionate approach to those who can’t get back on their feet”, Ms Bligh said.
[Related: Vic records highest loan deferrals]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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