Mark Coulton (Parkes, Deputy-Speaker, Minister for Regional Health, Regional Communications and Local Government) Share this | Hansard source

I rise to make my contribution to this debate on the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020. With regard to regulation around lending, obviously both the availability of credit and the protection of consumers are incredibly important. To the people that I represent, the ability to have credit and be treated respectfully and within the law is incredibly important.

Firstly, I'd like to thank those members who have contributed to this debate. The bill forms part of the government's economic recovery plan and amends the National Consumer Credit Protection Act 2009, known as the credit act, to support the flow of credit to the economy and introduce additional protections for consumers accessing high-cost credit. To improve the timely flow of credit, the bill amends the credit act so that the existing responsible lending obligations apply only to small amount credit contracts and consumer leases. The reforms remove the one-size-fits-all approach, which has unduly slowed down the time it takes for consumers to gain loan or credit-limit approvals, from the assessment of all other types of credit.

The new lending standards will align with APRA standards and require lenders to have sound credit-assessment and approval processes to assess consumers' capacity to repay debt without substantial hardship. The bill ensures sufficient consumer protections are maintained. Consumers will continue to have access to the Australian Financial Complaints Authority in the event that they have individual disputes with the financial institution. The bill also extends the best-interest obligations, which will apply to mortgage brokers from 1 January 2021, to other credit assistance providers to ensure credit assistance providers act in the consumer's best interest. The bill also introduces new obligations for providers of small amount credit contracts and consumer leases, to support improved financial inclusion while balancing the need for continued access to these products.

The reforms include imposing a cap on the total payments that can be made under a consumer lease, requiring small amount credit contracts to have equal repayments and equal repayment intervals, and strengthening penalties to increase compliance with the law. The bill will also allow the National Consumer Credit Protection Regulations 2010 to set the maximum amount of income a consumer can allocate towards repaying their lease.

I commend this bill to the House.

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