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senate vote 2020-12-02#6
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mackay staff
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2023-01-13 13:11:40
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Title
Motions — Banking and Financial Services- Motions - Banking and Financial Services - Keep responsible lending obligations
Description
<p class="speaker">Nick McKim</p><p>I move:</p>-
- The same number of senators voted for and against a [motion](https://www.openaustralia.org.au/senate/?id=2020-12-02.214.1) introduced by Tasmanian Senator [Nick McKim](https://theyvoteforyou.org.au/people/senate/tasmania/nick_mckim) (Greens), which means it failed.
- ### Motion text
- > *That the Senate—*
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- > *(a) notes that:*
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- >> *(i) the Government's proposed consumer credit reforms would:*
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- >>> *(A) repeal responsible lending obligations that require banks to ensure that a loan is not unsuitable for an individual customer; and*
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- >>> *(B) instead rely on prudential standards to manage risk and ensure the quality of consumer loans,*
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- >> *(ii) just this week:*
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- >>> *(A) Westpac, Australia's oldest bank, admitted that it breached prudential standards by failing to meet liquidity requirements, and*
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- >>> *(B) the Australian Prudential Regulation Authority said this demonstrates weaknesses in risk management, risk control and risk culture, and*
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- >> *(iii) these breaches of prudential standards were discovered during 2019 and 2020, after the Hayne Royal Commission, that was meant to bring an end to misconduct by the banks; and*
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- > *(b) calls upon the Government:*
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- >> *(i) to honour its agreement to recommendation 1.1. of the Hayne Royal Commission, that the National Consumer Credit Protection Act 2009 not be amended to alter the obligation to assess unsuitability; and*
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- >> *(ii) ensure that, in the words of Commissioner Hayne, the law is applied as it stands.*
<p class="italic">That the Senate—</p><p class="italic">(a) notes that:</p><p class="italic">(i) the Government's proposed consumer credit reforms would:</p><p class="italic">(A) repeal responsible lending obligations that require banks to ensure that a loan is not unsuitable for an individual customer; and</p><p class="italic">(B) instead rely on prudential standards to manage risk and ensure the quality of consumer loans,</p><p class="italic">(ii) just this week:</p><p class="italic">(A) Westpac, Australia's oldest bank, admitted that it breached prudential standards by failing to meet liquidity requirements, and</p><p class="italic">(B) the Australian Prudential Regulation Authority said this demonstrates weaknesses in risk management, risk control and risk culture, and</p><p class="italic">(iii) these breaches of prudential standards were discovered during 2019 and 2020, after the Hayne Royal Commission, that was meant to bring an end to misconduct by the banks; and</p><p class="italic">(b) calls upon the Government:</p><p class="italic">(i) to honour its agreement to recommendation 1.1. of the Hayne Royal Commission, that the <i>National Consumer Credit Protection Act 2009</i> not be amended to alter the obligation to assess unsuitability; and</p><p class="italic">(ii) ensure that, in the words of Commissioner Hayne, the law is applied as it stands.</p> <p class="speaker">Jonathon Duniam</p><p>I seek leave to make a short statement.</p> <p class="speaker">Scott Ryan</p><p>Leave is granted for one minute.</p> <p class="speaker">Jonathon Duniam</p><p>The government has not reneged on its acceptance of this recommendation by the royal commission. Recommendation 1 states:</p><p class="italic">The NCCP Act should not be amended to alter the obligation to assess unsuitability.</p><p>With respect to this recommendation, Commissioner Hayne noted:</p><p class="italic">Consumer advocacy groups urged me to recommend that the NCCP Act be amended to require lenders to determine whether a loan contract (or credit limit increase) was 'suitable' for the consumer (as distinct from 'not unsuitable'). I do not favour that proposal.</p> <p class="speaker">Scott Ryan</p><p>The question is that motion No. 894 in the name of Senator McKim be agreed to.</p> -
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