Credit Madness Inquiry Must Be Open And Transparent
“Reports that Commerce Minister David Clark has asked the Council of Financial Regulators to inquire into December's changes to the Credit Contracts and Consumer Finance Act is welcome news, but the inquiry must be real,” says ACT Leader David Seymour.
“I continue to hear about people turned down or credit for bizarre reasons. Today I heard of someone who missed out on credit for spending too much on their cat, another because their kids shared a room. This madness must be taken seriously by the Minister and not kissed off with a weak inquiry.
“So far there has been no official announcement, only reported statements. David Clark needs to say how the inquiry will be conducted, who will be asked to submit, and when it will be complete.
“I wrote to the Finance and Expenditure Committee on the Fifth of January, asking that Parliament conduct its own review. David Clark was copied on that letter and could easily lift out the terms of reference proposed there.
I suggest the Committee might like to initiative an inquiry into the operation of the Consumer Credit Contracts Act since the latest amendments commenced on December 2nd… it should not rely on the officials who advised on the Committee in 2019, it should seek testimony from industry practitioners.
It might ask:
- What have been the costs and benefits of the provisions, particularly those in Clauses 10 and 11 of the Bill as introduced, of the Credit Contracts Legislation Bill, and Regulations made under the Act that came into effect on December 1, 2021?
- Is the coverage of lenders in the bill too wide for the stated purpose of “ongoing issues in the credit market and significant harm to vulnerable consumers from problem debt.”
- How could the legislation or regulations be amended to ensure administration and compliance costs are minimised while achieving the stated aims of the legislation as introduced?
“David Clark needs to realise this issue is serious and will not go away. As the madness spreads, he needs to take responsibility. I will keep pushing for the Finance and Expenditure Committee to address this issue if the Minister does not set out the details of a serious inquiry.