The Consumer Action Law Centre, Financial Rights Legal Centre, CHOICE and Financial Counselling Australia welcome the opportunity to comment on Consultation Paper 303 on credit card responsible lending assessments.
We also welcome the Australian Securities and Investment Commission’s recent report on credit card lending in Australia. The findings of the ASIC report largely reflect our casework experience. Credit cards continue to be the most significant debt issue impacting callers to the National Debt Helpline.
We support the proposal to cap credit card limits at an amount that can reasonably be repaid within a period set by ASIC. While ASIC’s proposed three-year assessment period is a significant improvement on the current approach by credit card providers, we consider that a two-year assessment period would be more appropriate.
A two-year assessment period would ensure that Australians are not trapped in long term, expensive credit card debt. We consider that this proposal would significantly reduce the consumer harm being caused by inappropriate credit card product design and lending practices.180731 Joint submission - CP303 - FINAL