Finance Committee Should Review Changes to Credit Agreements and Consumer Credit Law

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ACT chief David Seymour has written to the finance and spending committee, asking it to initiate an investigation into the effects of recent changes to credit contracts and the law on consumer finance.

“Over the past month, I have heard about the new law from people in banking, mortgage brokers and people trying to get credit. They are frustrated with unnecessary red tape since it took effect on December 1, ”Seymour said.

“In one reported case, a man who requested an increase in his credit limit by $ 500 was faced with fifteen pages of forms, although he never missed a payment in the seven years he was in charge. card. It has also been reported that there may be an artificial credit crunch as the law slows lending at all levels.

“The finance and expenditure committee reviewed the bill to amend the law on credit contracts in 2019. Now this law is creating widespread headaches for people trying to get credit from their banks, and the committee should ask why.

I wrote to the committee, and its chairman, Dr Duncan Webb, asking that the committee use its powers to initiate a review or at the very least request a briefing on the havoc this law is causing. What is the point of the committee in having such power if it does not use its powers to hear the concerns of the public about the laws it was involved in developing?

“I was a member of the finance and expenditure committee when this law was passed. There has been an intense debate over interest rates, ancillary fees and the terms of high cost small loans for vulnerable lenders. Everyone thought we were dealing with predatory lenders, such as those who lend trucks that are referred to in the bill.

“No one believed the law would affect everyone looking for credit, whether they were vulnerable or not, but that’s exactly what happened.

“I hope that the Committee will conduct an investigation into the operation of the law so that those concerned can have their say. If he agrees with their concerns, he should make recommendations to the minister to correct the law as soon as possible.

A copy of the letter to the Finance and Expenses Committee can be found
here.

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