Submissions on RLO and BID extension released
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More than 100 submissions into the bill repealing responsible lending laws – which includes extending the best interests duty to more brokers – have been released as Senate begins hearings into the issue.
On Friday (19 February), the Senate economics legislation committee began its hearings for its inquiry into the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020, which seeks to repeal responsible lending obligations (RLOs) and expand the best interests duty (BID) to more credit assistance providers (among other changes).
The inquiry and its hearings are largely centered on the impacts of removing RLOs, and more than 100 submissions from the lending and mortgage industry – as well as other stakeholders – were released in relation to the proposed laws.
Application rework claims ‘contentious’, says broker
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A mortgage broker has suggested that inconsistencies in credit application criteria between lenders and credit assessors could result in rework and delay the process.
According to a recent Broker Pulse survey from Momentum Intelligence, undertaken in partnership with The Adviser, brokers have reported that, on average, around a quarter of their interactions with credit assessors involve the assessor not applying the policy “consistently”.
As such, brokers have been calling for credit assessors to apply lender policies consistently as broker satisfaction with lender assessors has continued to plunge to record lows.
While some lenders have reportedly suggested that rework from broker applications was a “very significant factor” in longer turnaround times, many brokers told The Adviser that the assertion of incomplete applications remained a “contentious” issue.
Mortgage Business
Treasurer urged to clarify reverse mortgage changes By Annie Kane 08 February 2021
A Senate committee has called on the Treasurer to provide further guidance and detail around some of the responsible lending reforms, including the provision of reverse mortgage credit assistance.
In December 2020, the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 was introduced into Parliament, setting out legal amendments relating to consumer credit and consumer leases, the controversial proposal to extend the best interests duty to more credit assistance providers and the removal of responsible lending laws for all but small credit contracts.
The bill was referred to the Senate economics legislation committee for review in December, with the Senate expected to report back to the chamber
Mortgage Business
RBA focused on lending, not house prices: Lowe By Malavika Santhebennur 08 February 2021
Governor Philip Lowe has said that the central bank will continue to focus on lending standards and hold discussions with regulators if they were to deteriorate.
Addressing the House of Representatives standing committee on economics on 5 February, the Reserve Bank of Australia (RBA) governor Philip Lowe has reiterated that the central bank would not focus on housing prices.
“As we have previously discussed at these hearings, the RBA does not – and should not – target housing prices,” Mr Lowe said.
“Instead, our focus is on the lending that is used to purchase housing. We want to see lending standards remain strong.”