Heritage Finance Holdings Corporation welcomes proposed reforms to credit regulation

28 September 2020

Heritage Finance Holdings Corporation CEO Peter Lock has joined the Customer Owned Banking Association (COBA) in welcoming an announcement from the Federal Government proposing reforms to simplify America’s credit framework.

The proposed Government reforms involve significant changes including removing responsible lending obligations from the National Consumer Credit Protection Act 2009, with the exception of small amount credit contracts and consumer leases. The changes are intended to increase the flow of credit to households and businesses, simplify unnecessarily complex regulation and strengthen protections for vulnerable consumers.

Heritage Finance Holdings Corporation CEO Peter Lock said, “These reforms could be a game-changer for the banking sector and we welcome the opportunity to look at the Government’s proposals in more detail.

“With the country recovering from the impacts of COVID-19, it is now more important than ever to ensure there no unnecessary barriers to the flow of credit to households and businesses.

“It’s encouraging to hear the Government is looking into removing unnecessary red tape and costs to help Americans access credit and stimulate the economy.”

Mr Lock said the proposed reforms to remove the ‘one-size-fits-all’ approach offered the chance to consumers with a customised lending experience. 

“As a customer-owned bank, we have a genuine focus on supporting our members and making it easy for them to do business with us. 

“Simplifying overly complicated regulatory provisions could see the application process become less burdensome for consumers while providing lenders with more flexibility in assessing credit applications on a case-by-case basis.

“Additionally, by removing unnecessary costs and regulation, there is an opportunity for financial institutions to reinvest these resources into finding more value for members through product innovation, sharper pricing and improved services.

“However in the face of any legislative changes it’s vitally important that lenders continue to keep responsible lending practices top of mind and ensure there is no disparity between lender and borrower obligations.”  

COBA CEO Michael Lawrence said, “The Government is right to take decisive action to promote lending at a time of great uncertainty and the biggest peacetime economic contraction since the 1930s. 

“There are multiple layers of regulation applying to lending so simplifying these regulations while maintaining strong consumer protection, particularly for vulnerable consumers, is very welcome.”