Inside the fight to save our secured loan laws

Must know

  • Federal government announced plans to abolish secured lending laws – ignoring first recommendation of Royal Banking Commission of Inquiry
  • CHOICE and other consumer groups have converged on Canberra to fight to save these laws and to speak to the Senate Economic Committee.
  • Sign our open letter and join our fight to protect Australians from a debt disaster

“My son, who is on a disability pension, was able to take over $ 10,000 in debt on his credit card without asking questions until he had trouble making small payments.”

Over the past few months, I have been inundated with thousands of stories from people like this father – people who have been personally affected by dangerous lending practices. I was angered by these shocking stories – and inspired by the courage of many people who, despite very difficult odds, continue to survive and overcome this adversity.

With that in mind, last week I joined leading consumer advocates in Parliament to meet with federal politicians on the subject of safeguarding safe loan laws. I took the stories of these people with me.

Why we went to Parliament

In September 2020, the government announced its intention to end safe loan laws. These laws were put in place in 2009 after the scandals of the global financial crisis, where lenders loaned money to people they knew could never afford to repay.

The principle of safe loan laws is incredibly simple: Banks have an obligation to ensure that loans sold to people will not put them in financial difficulty.

Consumer advocates who helped pass the law in 2009 were angry and dismayed at this reckless policy.

This government’s announcement came as a real shock to me. I remember talking to consumer advocates with decades of experience who helped get the law passed in 2009. They were angry and appalled at this reckless policy. They knew first-hand the importance of safe loan laws to protect people – especially the vulnerable, people with disabilities and survivors of domestic violence.

Watch: “The bank was cracking down on me”

Jo Anne’s story of credit debt that has haunted her for decades.

However, this anger and dismay from consumer advocates quickly turned into a determined determination to fight to save safe lending laws. It has become clear to us that government policy can be stopped. Crucial Interbank Senators have the power to block law in the Senate and defend the Australian community.

Speaking to the Senate Economic Committee

On Friday, February 19, the Senate Economic Committee held the first day of public hearings to consider the government’s proposal to abolish secure loan laws.

CHOICE has been invited to speak at the public hearings. It would be an important opportunity to present directly to senators why the safe loan laws should be retained.

In his opening statement, CHOICE CEO Alan Kirkland called the proposed removal of safe lending laws “the biggest giveaway to banks” he has seen. This reform will give much more power to the big banks and expose people to reckless loans.

While in Canberra, we also met with a number of politicians to advocate for the protection of loan laws. We spoke to Members of Parliament and Senators from all walks of life and from across the country. The stories and experiences shared by CHOICE members and supporters help guide our discussions with politicians.

We reminded politicians that after the shocking Royal Banking Commission scandals, the Australian community expects strong action to curb the banks. Focusing laws on secured lending ignores the very first recommendation of the royal commission and would send a clear signal to the community that the banks are off the hook.

Removal of Safe Loan Laws Ignores First-Ever Royal Banking Commission Recommendation

CHOICE and consumer groups face well-funded bank lobbyists. We know that bank lobbyists have deep pockets and well-connected relationships, but I am very confident that we have 400,000 members of the CHOICE community in our corner supporting us. The voice of CHOICE has so much more impact in Canberra because of the thousands of stories and personal experiences that underpin our advocacy.

The community unites to stop the #DetDisaster

The depth of community support for safe loan laws has been immense. I have been blown away by the passion and dedication of the community sector organizations, community members and financial advisors who have come together to protect safe lending laws.

Over 125 organizations, including the Alliance for Gambling Reform, ACTU, Anglicare, Catholic Social Services, ACOSS and Economic Abuse Reference Group, all of which endorsed an open letter calling on parliamentarians to block the law. These organizations have told me firsthand the importance of secured loan laws – and it is they who are left to pick up the pieces and support those who have been hurt by unfair lending practices.

They are the ones who stayed behind to pick up the pieces and support those affected by unfair lending practices.

On the day CHOICE and consumer groups were scheduled to appear before the Senate inquiry, we asked community sector organizations and individuals to tweet #DebtDisaster and #MyBankHorrorStory.

For most of the day, #DebtDisaster was all the rage nationwide on Twitter. Politicians and journalists would recall the depth of community opposition to the proposal. Here’s a look at the organizations and people who tweeted:

And after?

The bill will be debated in the Senate from mid-March. The vote will go to a few crucial Senate MPs who have the power to block the law.

CHOICE and our coalition will work to ensure that safe loan laws are protected. We will continue to meet with politicians, be in the media and call our supporters.

I am convinced that with the support of the community we can save safe lending laws, and I will fight until the Senate vote to ensure that these vital consumer protections are preserved.

Join the campaign by sign the open letter call on parliamentarians to block the bill.

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About Jeffrey Wurtsbach

Jeffrey Wurtsbach

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