Australia's government will loosen responsible lending laws in a bid to boost the flow of credit and help the economy recover from its first recession in nearly 30 years.
Australia's banking industry, one of the world's most profitable, was slammed by the Royal Commission for rampant malpractice that included charging fees to dead people, using overly aggressive sales tactics and providing poor financial advice to clients.
Australian banks had tightened lending practices following a government-led inquiry, known as the Royal Commission, which found lenders were approving loans to people that could not repay them.
"How can we have so quickly forgotten the hard lessons from the GFC and the Hayne Royal Commission?"
The changes remove responsible lending laws introduced in the wake of the global financial crisis that, among other things, require banks to check whether information provided by borrowers in their loan applications is correct.
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Drivers will need to apply for the permits online and show they have all the paperwork they need to ferry goods to Europe. He said that the government has invested in increased customer agents capacity in its efforts to avoid disruptions.
The move sent banking stocks soaring, but drew sharp criticism from consumer groups and the opposition Labor Party.
Banks and investors cheered the news with National Australia Bank and Westpac Banking shares rising over 6%, while Commonwealth Bank of Australia was up more than 3%.
"This is a significant initiative that will reduce red tape for consumers seeking a loan and importantly speed up the process for customers to obtain approval for a loan", Westpac Chief Executive Officer Peter King said.
New reforms announced today by Treasurer Josh Frydenberg will remove barriers that traditionally slowed down businesses and consumers from accessing credit.
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The Australian Banking Association welcomed the changes.
"These changes will make it easier for the majority of Australians and small businesses to access credit, reduce red tape, improve competition, and ensure that the strongest consumer protections are targeted at the most vulnerable Australians", the Treasurer said in a statement this morning.
The move is part of a broader regulation-busting package aimed at helping the economy rebound from the coronavirus-induced recession.
Writing for The Australian, Frydenberg said that lending laws had become so absurd that borrowers were often forced to justify their discretionary spending even on such minor expenditures as a Netflix account.
Mr Frydenberg said the changes will restore balance to a system that has seen the "pendulum swing too far away from borrower beware to lender beware".
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Stat News noted that the order has not been implemented, and the savings "do not now exist". The initiative will cost the U.S. government $6.6 billion.
Karen Fox, CEO of the Financial Rights Legal Centre, said the reforms will blow Australians' already spiralling debt levels out of control.