Credit a hard ask if Labor has way

BUYING a new car or TV on credit will soon be harder if Labor can get new laws through Federal Parliament this week.

The Opposition wants to act immediately on the banking royal commission’s recommendations to fix financial laws on dodgy credit providers. They also want to ban grandfathered commissions for financial planners and to stop the exploitation of indigenous people through the selling of funeral insurance.

Opposition Leader Bill Shorten (right) says another six months could pass before the laws are changed unless the government agrees to them now.

“There’s only three days of Parliament, realistically, before August,” he said yesterday. “That’s too long, the victims have waited too long.”

Labor wants to remove point-of-sale exemptions for credit sales such as car loans and remove an exemption that means the corporate regulator has no oversight of insurance claims.

That would make it tougher to get a car loan at a car dealership, or to buy a TV on credit at a department store.

Banks would also be required to co-operate promptly with the Australian Financial Complaints Authority.

The royal commission recommended the changes be made as soon as possible, but the gGovernment is planning to deal with them by 2021.

Labor’s treasurer spokesman Chris Bowen meanwhile would not say what the party planned to do about mortgage broker commissions after the royal commission recommended they move to a userpays model.

“The royal commission found that commissions are affecting which loans are taken and the size of those loans,” Mr Bowen told caucus yesterday. “There is a sensible way through that we are consulting on.”

The Coalition is concerned the shift to a user-pays model will give the big banks extra power and effectively destroy the industry.

In another response to the royal commission, the Australian Securities and Investment Commission yesterday said a new office of enforcement would be established at the corporate watchdog after recommendations that the authority better hold financial misconduct to account.