With the party coming out against the plan, the chances of passing the rollback are essentially zero
One Nation looks to have scuttled the government’s plan to roll back responsible lending laws after the party’s leader, Sen. Pauline Hanson, said that ditching the laws would leave Australians vulnerable to predatory banks.
Last year, the government announced a planned rollback of laws that govern how banks assess customers for mortgages and personal loans. Hanson said Wednesday that the government was telling the public to relax and “trust the big banks.”
“But I say millions of Australians should not be left vulnerable to predatory banking conduct,” she said in a statement.
Labor is already opposed to the rollback, which means the Coalition needs support from three of five Senate crossbenchers to pass its bill, The Sydney Morning Herald reported. Independent Tasmanian Sen. Jacqui Lambie reportedly opposes the rollback, and South Australian independent Rex Patrick said he was unconvinced, as lending data didn’t show the rules had hurt borrowers.
“Whilst I accept that the changes would reduce bank red tape, I’m not prepared to allow vulnerable borrowers to be disadvantaged for the benefit of the banks,” Patrick told the Herald.
With One Nation’s two votes now against the rollback, the government’s chances of passing the law are essentially zero unless some senators change their minds, the Herald reported.
“The government is giving the big banks almost carte blanche and is allowing them to self-regulate using the banks’ own weak, self-serving code of conduct that doesn’t provide strong consumer protection or responsible lending provisions,” Hanson said. She said rolling back responsible lending rules would “drag Australia back to the horror days.”
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Hanson said that if the government wanted to improve loan approvals, it should adjust Australian Securities and Investment Commission guidelines rather than ditching responsible lending laws.
The government announced its plans to kill the laws last year amid fears that a COVID-induced recession would make banks reluctant to lend, undermining the economic recovery, the Herald reported. In the months since, however, the strength of the recovery has consistently blown past economists’ predictions, and mortgage lending has skyrocketed, driven by record-low interest rates and soaring house prices.