However, Labour says the committee’s report does not go far enough and has missed an opportunity to address the toughening up on exorbitant rates charged by loan sharks.
The Commerce Select Committee returned its report on the Credit Contracts and Financial Services Reform Bill yesterday.
Commerce Minister Craig Foss says the proposed Bill will “increase confidence in the role consumer credit plays in our financial markets”, which is part of the Government’s business growth agenda.
“We are improving protections for borrowers by promoting responsible lending practices without imposing unnecessary compliance costs on lenders who already have good systems in place,” Mr Foss says.
Among the select committee’s proposed changes are:
- Clarifying the status of the Responsible Lending Code that will set out the best practice guidance for responsible lending
- Improvements to the credit repossession rules in the Bill that will increase protection for consumers from unfair repossession practice
- Amending the continuous disclosure regime to require a minimum repayment warning on all credit card statements
- Significantly increasing penalties for creditors that breach credit laws to maximum fines of $200,000 for individuals and $600,000 for companies