Non-bank lenders are calling for changes to the federal government’s proposed national consumer credit legislation.
According to The Australian Financial Review, non-bank lenders claim the proposed legislation will tie them down with red tape and impose unfair costs on small financiers.
Under the proposed legislation, lenders need to hold a current Australian credit license and ensure credit is ‘responsibly’ provided.
Abacus head of public affairs, Mark Degotardi, told a senate economics committee yesterday that the proposed legislation would hurt smaller lenders who will be forced to pay $21,000 a year for a license – the same as major banks.
The incoming legislation has been branded a one-size-fits-all approach to regulation by bank and non-bank lenders alike, with many smaller lenders calling for an advocated test that measures assets and liabilities instead.
The Australian Bankers Association yesterday reiterated its call for a more comprehensive credit reporting system to be included in the new laws, which would make borrowers 24 month credit history available to a bank as part of its lending criteria.