The submission deadline for comment on NCCP amendments has passed, and Gadens Lawyers' Jon Denovan has blasted the unintended consequences of the legislation.
Denovan has expressed concern that amendments putting more liability on brokers could hurt non-conforming lenders.
Denovan that under previous legislation, courts could potentially make decisions impacting the terms of a lender’s loan contract. However, under the proposed legislation financial redress for unfair behaviour is to fall upon brokers, according to Denovan. He said this added liability could make brokers less willing to help clients needing specialist finance.
"There’s already stories of brokers refusing to do anything other than prime lending because they’re afraid about the licensing impact," Denovan said.
"This could be just another reason for brokers to find an excuse to refuse service to those who need it the most. They’re the ones who most need the services of a mortgage broker," he added.
Denovan also took aim at a proposed cap on fees for payday lenders, labelling the move unconstitutional.
"My interpretation is that perhaps the law is unconstitutional, because it's actually preventing people from borrowing. Should people be put in a position where they simply cannot borrow money for the short term? What are they supposed to do, starve to death?" he said.
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