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The National Consumer Credit Protection laws have meant fewer loans but better lending outcomes.
Speaking at yesterday’s ASIC Annual Forum, NAB Broker general manager Steve Kane said that while the NCCP has meant fewer loans and less credit for consumers, it has also created better lending outcomes.
“I think there is a higher level of loan application that does not go past the first interview process today, whereas every loan tried to be approved or resettled previously,” Mr Kane said.
“Many lenders now see when they go through the process properly that this is not going to fly because it is not in the best interest of the customer.
“We are seeing a lot of good work in relation to the way in which this was directed specifically at consumer protection legislation and I think that it is working quite well.”
Mr Kane’s comments were made during a discussion of national credit laws with key industry figures that included Philip Field, the lead ombudsman for banking and finance at the Financial Ombudsman Service.
Mr Field agreed that NCCP had improved lending standards, particularly by raising standards across the broader lending market.
“I think it has changed quite a bit, but to put it into perspective, before the NCCP came in, most lenders in terms of banks and credit unions and mutuals had codes of practice around responsible lending in any event, so you would think that they for the most part were lending responsibly,” he said.
“What the legislation did was broaden that more across the industry.”
