Institute of Certified Bookkeepers

Government announcement

The Government will simplify the system by moving away from a “one- size-fits-all” approach while at the same time strengthening consumer protections for those that need it.

Key elements of the reforms include:

  • Removing responsible lending obligations from the National Consumer Credit Protection Act 2009, with the exception of small amount credit contracts (SACCs) and consumer leases where heightened obligations will be introduced.
  • Ensuring that authorised deposit-taking institutions (ADIs) will continue to comply with APRA’s lending standards requiring sound credit assessment and approval criteria.
  • Adopting key elements of APRA’s ADI lending standards and applying them to non-ADIs.
  • Protecting consumers from the predatory practices of debt management firms by requiring them to hold an Australian Credit Licence when they are paid to represent consumers in disputes with financial institutions.
  • Allowing lenders to rely on the information provided by borrowers, replacing the current practice of ‘lender beware’ with a ‘borrower responsibility’ principle.
  • Removing the ambiguity regarding the application of consumer lending laws to small business lending.
These changes will make it easier for the majority of Australians and small businesses to access credit, reduce red tape, improve competition, and ensure that the strongest consumer protections are targeted at the most vulnerable Australians.  
Media Release      PDF CopyGovernment Fact Sheet 
Media Article -

ICB Comment

We await to see if it makes a difference.  The detail has not yet been released.  Previous initiatives by Government to have the banks support SME generally and especially at this time have been poorly executed.  Commonwealth Bank is known to be the most supportive of the Government backed Loan Guarantee Scheme, but with only 15,000 loans approved under the scheme (statistic heard in the media) it doesnt appear to have successful.

We applaud the concept behind the scheme - now for the detail and execution.

  • 28 September 2020