Need to know
- The Federal Government has announced plans to axe safe lending laws – ignoring the banking royal commission's first recommendation
- CHOICE and other consumer groups converged on Canberra to fight to save these laws, and to speak at the Senate Economics Committee
- Sign our open letter and join our fight for protect Australians from a debt disaster
"My son, who is on a disability pension, was able to reach a debt in excess of $10,000 on his credit card with no questions asked until he had difficulty just making small payments."
Over the past few months, I've been overwhelmed by thousands of stories from people like this father – people who've been personally affected by unsafe lending practices. I've been angered by these shocking stories – and inspired by the bravery of many who, despite very difficult odds, continue to survive and overcome this adversity.
With that in mind, last week I joined leading consumer advocates at Parliament House to meet with federal politicians about saving safe lending laws. I took the stories of these people with me.
Why we went to Parliament House
In September 2020, the government announced plans to axe safe lending laws. These laws were put into place in 2009 after the scandals of the global financial crisis, where lenders lent money to people they knew could never afford to repay.
The premise of safe lending laws is incredibly simple: banks have an obligation to ensure that loans sold to people will not put them in financial hardship.
Consumer advocates who helped get the law passed in 2009 were angry and dismayed at the reckless policy
This government's announcement came as a genuine shock to me. I remember talking with consumer advocates with decades of experience who helped get the law passed in 2009. They were angry and dismayed at the reckless policy. They knew first-hand the importance that safe lending laws have in protecting people – particularly vulnerable people, people with disabilities and survivors of domestic violence.
Jo Anne's story of the credit debt that's haunted her for decades.
However, this anger and dismay from consumer advocates quickly transformed into a determined resolve to fight to save safe lending laws. It became clear to us that the government's policy can be stopped. Crucial crossbench senators have the power to block the law in the Senate and stand up for the Australian community.
Speaking at the Senate Economics Committee
On Friday 19 February, the Senate Economics Committee held the first day of public hearings to scrutinise the government's proposal to axe safe lending laws.
CHOICE was invited to speak at the public hearings. This would be an important opportunity to put the case directly to senators for why safe lending laws should be retained.
In his opening statement, CHOICE CEO Alan Kirkland called the proposed axing of safe lending laws "the largest giveaway to the banks" that he's seen. This reform will give significantly more power back to the big banks, and leave people exposed to reckless lending.
While in Canberra, we also met with a number of politicians to advocate for why lending laws should be protected. We spoke with members of parliament and senators from across the political spectrum, and from across the country. The stories and experiences shared by CHOICE members and supporters help guide our discussions with politicians.
We reminded politicians that after the shocking scandals of the banking royal commission, the Australian community expects strong action in reining in the banks. Axing safe lending laws disregards the very first recommendation of the royal commission and would send a clear signal to the community that banks are off the hook.
Axing safe lending laws disregards the very first recommendation of the banking royal commission
CHOICE and consumer groups are up against well funded banking lobbyists. We know banking lobbyists have deep pockets and well connected relationships, but I take great confidence in the knowledge that we've got 400,000 members of the CHOICE community in our corner supporting us. CHOICE's voice is so much more impactful in Canberra because of the thousands of personal stories and experiences that underpin our advocacy.
Community unites to stop the #DebtDisaster
The depth of community support for safe lending laws has been immense. I've been blown away by the passion and dedication of community sector organisations, members of the community, and financial counsellors who have united to save safe lending laws.
Over 125 organisations, including the Alliance for Gambling Reform, the ACTU, Anglicare, Catholic Social Services, ACOSS and Economic Abuse Reference Group, who have all endorsed an open letter calling on parliamentarians to block the law. These organisations have told me first-hand the importance of safe lending laws – and they are the ones left to pick up the pieces and support people who have been hurt by unfair lending practices.
They are the ones left to pick up the pieces and support people hurt by unfair lending practices.
For most of the day, #DebtDisaster was trending nationally on Twitter. Politicians and journalists would be reminded of the depth of community opposition towards the proposal. Here's a snapshot of organisations and people who tweeted:
The legislation is going to be debated in the Senate, as early as mid-March. The vote will come down to a few crucial senate crossbenchers who have the power to block the law.
CHOICE and our coalition will be working to ensure that safe lending laws are protected. We will continue meeting with politicians, being out in the media, and calling on supporters.
I'm confident that with the support of the community we can save safe lending laws, and I'll be fighting until the Senate votes to ensure these vital consumer protections are saved.
Join the campaign by signing the open letter calling on parliamentarians to block the legislation.
Stock images: Getty, unless otherwise stated.