A Tasmanian farming couple who were financially devastated by unethical conduct from the ANZ Bank say the federal government's responsible lending reforms could result in more people getting hurt.
Treasurer Josh Frydenberg announced the government's plan to scrap responsible lending obligations in September last year. The changes were part of a wider banking reform aimed at making access to credit easier for Australians.
Responsible lending obligations in the Consumer Protection Act ensure that banks can't take advantage of vulnerable clients.
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The reforms are being reviewed by the Senate Economics Legislation Committee with a report due back in March. A vote on the legislation is expected soon after that report.
Mr Frydenberg said the aim of the government's reforms was to simplify Australia's credit framework while also protecting the most vulnerable.
But Michael and Dimity Hirst (pictured), who ran a cattle and lamb farm near Westbury, say the changes could result in regular people getting hurt.
In 2018, the Hirsts appeared before the royal commission in Brisbane. Their dealings with ANZ over many years had cost them their farm and left them financially destitute.
After the global financial crisis ANZ took over their account with Landmark. In the space of two weeks the bank devalued their business 60 per cent, closed their accounts and foreclosed on their home.
Before this two week period, Mr Hirst had met with the bank where no concerns were expressed about their business direction or ability to repay their loans.
A legal battle, which the Hirsts are still fighting, ensued. The couple were one of the lucky few who were given the chance for their case to be heard at the High Court.
The court determined the banks had behaved inappropriately and awarded the Hirsts about $700,000 in compensation.
It was almost a decade before ANZ apologised for what happened.
The government has only implemented one third of the recommendations from the Banking Royal Commission two years ago, despite promising to accept them all.
"If was a really horrific time in our lives - we went from being quite comfortable to having three days to move out of our house with no where to go," Mrs Hirst said.
"We had four children at the time, all schooling, and still to that point we really just didn't know why this was happening."
"The current government was never into the Royal Commission. They were pulled kicking and screaming to actually set it up. It was only the pressure of Labor and the Greens that actually got them to the Royal Commission," Mr Hirst added.
The Hirsts are not the only ones concerned. After the government's plan was announced consumer groups, including Choice, the Consumer Action Law Service, Financial Counselling Australia and the Financial Rights Legal Centre, have hit out at the proposal.
In a strongly worded letter the groups said the proposed changes fly in the face of the Hayne Royal Commission's recommendations and could have disastrous consequences.
Financial Rights Legal Centre chief executive officer Karen Cox said the government was pandering to banks and lenders by repealing a law the Hayne Royal Commission said should apply as it stands.
"The removal of safe lending will put individuals and families at risk of all the aggressive lending practices that were rife before the responsible lending regime was introduced in 2009," Ms Cox said.
"Our Government wants free-flowing credit to reign at a time when unprecedented numbers of Australians have had to ask for loan deferrals amidst COVID-19. It simply defies logic.
"Financial Rights helps thousands of Australians drowning in debt and we continue to see the legacy of debt and disaster that predates the Banking Royal Commission. The last thing people need now is inappropriate and unaffordable credit that only enrichens banks and lenders."
The Reserve Bank has publicly supported the changes but an internal review releasedvia freedom of information laws showed staff had concerns that they could lead to Australians taking on too much debt.
The success of the legislation in parliament will be reliant on crossbenchers with the Greens and Labor already saying they won't support the legislation.