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‘Going easy on the banks’: Labor, Greens warn against looser lending laws

Plans to ease lending rules for banks could face a fight to get through the Senate, with Labor and the Greens warning against rolling back consumer protections.

Treasurer Josh Frydenberg announced on Friday plans to simplify lending rules to allow the easier flow of credit and mortgages into the economy in a bid to recover from the COVID-19 recession.

Shadow treasurer Jim Chalmers said Labor was deeply concerned the changes signalled an intention to dump the recommendations of the banking royal commission.

Shadow treasurer Jim Chalmers said Labor was deeply concerned the changes signalled an intention to dump the recommendations of the banking royal commission.Credit:Alex Ellinghausen

“What started a decade ago as a principles-based framework to regulate the provision of consumer credit has now evolved into a regime that is overly prescriptive, complex and unnecessarily onerous on consumers,” he said.

The changes will see responsible lending obligations removed from the National Consumer Credit Protection Act, and allow lenders to rely on the information provided by borrowers, replacing the current practice of “lender beware” with a “borrower responsibility” principle.

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