A Melbourne-based broker and former CEO of the Australian Institute of Professional Brokers has penned an open letter to the regulators, government and central bank demanding a “frank conversation” about the National Consumer Credit Protection Act (NCCP) and the role of the regulators.
In the open letter, Maria Rigoni, founder and owner of Universal Wealth Management, has called out the regulators for “financial exploitation”.
“It is fact that regulators, in recent times, have interfered where they have no right to,” Rigoni wrote.
“ASIC and APRA have caused loan repayments to be more expensive for borrowers and lender profits fatter.
“The regulators make subjective judgement calls about how people are able to use their personal assets, investments, and cash flow, even when those calls are in conflict with the intention of current legislation.”
Speaking to Australian Broker
about her open letter, Rigoni said ASIC’s recent crackdown on interest-only lending was the last straw for her, especially when she was not able to refinance a responsible client into an interest-only loan for their benefit.
“Lenders have said ASIC has approached them and ASIC’s opinion is if people want interest-only loans to keep their repayments low then the lender should not accommodate them. The client’s requirements and objectives which make [an interest-only] loan a 'not unsuitable' loan have been ignored. ASIC have turned around and said it should be an unsuitable loan,” Rigoni said.
“ASIC are just open-slather going to lenders and saying this is what we believe and it is just nonsense. My client now can’t refinance from his current lender to a new lender at a cheaper interest rate. His not unsuitable loan has been turned into an unsuitable loan, but where does he go to get that fixed?”
According to Rigoni, this illustrates the lack of protection the current consumer protection laws offer and the need for a complete overhaul of the NCCP.
“The NCCP is nonsensical consumer protection. The consumer protection laws are not protecting the consumer and they are not protecting me either," Rigoni told Ausrtralian Broker
“What I would like to see is a total overhaul of the NCCP. The whole focus of the NCCP does not give any power for a borrower to be a responsible borrower. It is all about the lender having the power and control.”