COBA and Master Builders welcome proposed credit reforms
The Customer Owned Banking Association (COBA) and Master Builders Australia have both welcomed an announcement from the Federal Government that it will simplify Australia’s credit framework that will allow consumers and small businesses to get timely access to credit.
Michael Lawrence, COBA chief executive, said customer owned banking institutions did not need “prescriptive and complex laws” to make sure that it lends responsibly.
“Our sector’s sound lending practices are also subject to strong prudential oversight by APRA,” Lawrence said.
“There are multiple layers of regulation applying to lending so simplifying these regulations while maintaining strong consumer protection, particularly for vulnerable consumers, is very welcome.
“Unnecessary and duplicative regulation hurts consumers because resources are diverted away from investment in product innovation, better service and better pricing.
“Consumers can also be subject to unnecessary delays and frustrating paperwork. There is also the broader deadening effect on the economy’s dynamism of too much regulation.”
Denita Wawn, Master Builders Australia chief executive, said they commended the Federal Government for winding back regulation to a position that allowed the market more flexibility to approve housing finance.
“We hope this means that banks will reconsider their loan to value ratios (LVRs) to help people overcome the deposit gap,” Wawn said.
“We expect that loan applications for borrowers should also become less cumbersome.
“The Reserve Bank has already flagged that the tighter regulatory provisions have been holding back credit growth and some banks have acknowledged that they have been forced into being overly conservative.
Wawn said it was good to see the Federal Government giving banks flexibility to deal with applications on a case by case basis which should result in lenders providing mortgage finance to more people.
“It should help streamline the processing of HomeBuilder applications on top of pre-approval processes which have been adopted in some states. All states and territories should adopt these pre-approval processes,” Wawn said.
“Access to finance, land titling and planning approvals can substantially delay building of new homes and measures are needed to remove these impediments and speed up processing of HomeBuilder applications.”
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
