The Royal Banking Commission recommendations were re-examined this week, with responsible lending practices seen by some legal experts to be even more crucial in the current economic climate.
As a reminder, on February 1, 2019, the royal banking commission recommendations were presented to the government by Commissioner Kenneth Hayne. These have focused on tighter enforcement of existing banking regulations, monitoring compensation policies, and cracking down on irresponsible lending practices.
Two years later, 45 of the 76 recommendations have yet to take effect, four of which have been completely dropped, according to Guardian Australia analysis.
A new call to action on late recommendations is now coming from law firms like Maurice Blackburn Lawyers. The firm’s board director, Kim Shaw, said implementing consumer protection is imperative after the last year of economic upheaval.
“The federal government has indicated that COVID-19 was the reason for the delay of a number of recommendations, but the fact remains that many of those recommendations are now more important than ever to ensure consumers are properly compensated for damages caused and protected against bad behavior. ,” she said.
Maintaining existing responsible lending laws was one of the first recommendations to delete.
At the time, Treasurer Josh Frydenberg said the decision was made to “reduce barriers to switching credit providers, encouraging consumers to look for a better deal.” The September 2020 announcement was positioned as part of the post-COVID economic recovery plan.
However, Shaw said responsible lending practices are even more essential now.
“The government continues to try to make it easier for banks to lend money and provide credit without the necessary additional protections – measures that risk causing considerable problems for consumers when they can least afford it.” Shaw said.
While Australia quickly recovered from the mid-2020 recession as the COVID outbreaks have been contained, the past 12 months have left many in an uncertain financial situation.
According to the Australian Prudential Regulatory Authority (APRA), borrowers have deferred loans totaling $ 51.2 billion due to COVID-19, home loans account for more than $ 42 billion of these deferrals.
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