Consumer advocates ‘gobsmacked’ by majority Senate report on predatory lending laws

A newly released report by the Senate Economics Legislation Committee has recommended Parliament pass proposed laws that fall woefully short of what advocates say is needed to protect people from predatory lenders.

The National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 (the Bill) is set to be debated in Parliament today, after the Senate Inquiry report into the Bill was handed down on Friday 12 March 2021.

“The Government’s decision to push ahead with this Bill today simply defies all logic,” says Alycia Gawthorne, Campaigns & Advocacy Adviser for Consumer Action Law Centre, a member of the Stop the Debt Trap Alliance. The Alliance advocates for better protections against predatory loans like payday loans and consumer leases.

“In 2015 the Government initiated a review of predatory lending laws, which made some really sensible recommendations for reform to make sure people don’t fall into a debt trap. The Government accepted the majority of these recommendations and even released draft legislation.

“It’s absolutely mindboggling that now – more than five years later – the same Government is introducing laws that fail to meet the basic level of protections recommended by its own review, while taking an axe to responsible lending protections for other types of credit,” she said.

The proposed changes are part of the Bill to repeal safe lending laws, which advocates say would set Australia up for a debt disaster.

“People are still trying to get back on their feet after experiencing significant financial hardship during COVID,” Ms Gawthorne said.

“With crucial income support measures due to wind up at the end of the month, the Government’s Bill will see people sent straight into the clutches of predatory lenders.

“We’re counting on the crossbench senators to take a stand and vote against this Bill, which if passed, will have devastating impacts for our community and economy,” she said.

The Bill is listed for debate in Parliament on Monday 15 March 2021. With Labor and the Greens set to vote against the Bill, the crossbench senators have the deciding votes.

END

The Stop the Debt Trap Alliance is a coalition of consumer advocacy organisations from around Australia, including financial experts, community advocates and service providers. The coalition includes CHOICE, Financial Counselling Australia, Financial Rights Legal Centre and many more.

Media Contact: Mark Pearce, Consumer Action Law Centre, 0413 299 567, media@consumeraction.org.au

 

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