The big banks claim the planned rollback of responsible lending laws will help customers, saying it will lead to faster loan approvals by cutting the amount of detail consumers must provide on their living expenses.
The Federal Government is proposing changes that would mean banks are no longer subject to responsible lending obligations. It says it will make it faster for consumers to access credit, while borrowers will still be protected through other regulations on banks and redress schemes.
Commonwealth Bank, Westpac and National Australia Bank have backed the changes, saying they will remove barriers to credit.
NAB says it will continue to assess if customers can repay their loans without falling into hardship. It says lending currently is being slowed down by requirements for banks to collect too much information about customers’ living expenses.
CBA says banks are currently asking for information that customers find “burdensome” to provide, but the data does not provide a useful guide on a customer’s ability to repay a loan.