to abide by the laws and has ordered an inquiry into the impact of the new rules. The Minister has also summoned chief executives of banks for a face-to-face meeting, providing them with an opportunity to explain how some of them were failing in their responsible lending duties. “It is important we get to the bottom of exactly what aspects of the Credit Contract and Consumer Finance Act (CCCFA) responsible lending rules were not being adhered to by some banks previously,” he said.
However, his accusations have been denied by the chief executive of the Bankers’ Association, Roger Beaumont, who said banks were merely complying with the new rules as they are written. He noted that the suggestion banks were not abiding by their responsible lending obligations “comes as a surprise”. “Banks take their obligations to comply with the law very seriously. That was the case before the rule change, and remains the case,” he said.
On the other hand, Beaumont revealed that banks have also warned the government that changes to the act may result in some potential borrowers no longer qualifying for loans “We’ve made several submissions on the CCCFA law change and new regulations since 2018. In our submissions we’ve set out our concerns all along the way. The investigation might be able to clarify some of those concerns and hopefully identify some useful solutions,” he said.
