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We are having the wrong debate about responsible lending

16 March 2021

The responsible lending provisions, while well-intentioned, provide only an illusion of protection for consumers.

The debate about the Morrison government’s proposed repeal of responsible lending laws is being framed in a context that no longer exists. Those opposed to the bill now before federal parliament characterise it as a weakening of consumer protections that will leave borrowers exposed to rapacious lenders. The government, and the lenders, argue that it will free up credit for borrowers, make it easier and faster to get access to credit and generate efficiencies for the lenders.

What appears to be missed by the consumer advocates, however, is that as it stands, the bill will do little to weaken consumer protections because they are effectively advocating an interpretation of the law that is no longer the law, if it ever was.

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