Last month, a Melbourne-based broker and former CEO of the Australian Institute of Professional Brokers 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.
Speaking to Australian Broker
about her open letter, Maria Rigoni, founder and owner of Universal Wealth Management, claimed ASIC’s recent crackdown on interest-only lending illustrates the lack of protection the current consumer protection laws offer and the need for a complete overhaul of the NCCP.
“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 told Australian Broker
“The NCCP is nonsensical consumer protection. The consumer protection laws are not protecting the consumer and they are not protecting me either.
“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.”
Rigoni is not alone. Other brokers have expressed their agreement in the Australian Broker
forum. One commenter, “L Best”, said the whole Act should be scrapped and done over.
“Any loan decision should be shared – an equal responsibility for the decision to borrow and the decision to lend should be 50/50 between the parties. Not a decision that is borne 100% by the lender. We are dealing with adults that should understand and make informed decisions for themselves, with guidance from their legal and financial advisers…
“Scrap the whole Act and start again and look for a measured an equal means to regulate.”
What do you think? Is it time for the NCCP to undergo a complete review? Have your say in our online poll now.