ASIC’s early warning to banks: Take care of hardship cases or we’ll do it for you
ASIC has warned the banks that their handling of financially distressed borrowers would be a key focus over the next year as delinquent loans increase and calls to a national debt hotline jumped by 30 per cent.
“It’s never been harder to get a bank loan or a credit card in Australia," ANZ CEO Shayne Elliott said. Photo: AAP/Lukas Coch
The ASIC statement came as the head of ANZ, Shayne Elliott, warned that banking was becoming the preserve of the wealthy as interest rates rise.
“We have decided as a community that we want banks to be a lot safer and regulated and while ASIC and APRA are all well-meaning, the net effect of all that regulation is that banking is becoming the preserve of the wealthy,” Elliott told the QUT Business Leaders’ Forum in Brisbane last week.
“It’s never been harder to get a bank loan or a credit card in Australia.
“The average person in Australia cannot afford the average home.
“The average income in Australia is $90,000, the average home is $900,000. Even if you had the deposit, you won’t get a bank loan to support that.”
He said restricting access to credit was creating safer banks but at the cost of reduced economic dynamism.
ASIC had previously warned that predatory lending would be a focus in 2023. It has written an open letter to the major lenders warning it would be monitoring the banks and has started data collection and a review of the 10 biggest lenders to understand their approach to financial hardship.
“Based on ASIC’s early engagement with some lenders, we have identified several areas that are important for lenders to focus on to ensure they meet their obligations to consumers who are experiencing financial hardship,” ASIC’s letter said.
Among its demands, ASIC detailed 12 areas of the National Credit Code that lenders had to follow, which included hardship assistance.
