The submissions for Australia’s National Consumer Credit Protection Act were made public yesterday. Many major banks, associations, regulators and consumer advocates called to end loopholes for buy now and pay later providers that see them avoid safe lending laws. The proposed reforms would see companies such as Afterpay, Zip, and Humm having to fall in line with other credit organisations.
ANZ, Westpac, Consumer Owned Banking Association, Australian Retail Credit Association and National Legal Aid were among the organisations that put forward submissions.
“We’ll only get one chance to get the regulation of BNPL right. And this is it. As the Banking Royal Commission showed in spades, loopholes in the law are disasters. BNPL is credit. It should be regulated like all other credit products,” said Fiona Guthrie, Financial Counselling Australia CEO.
“With some buy now, pay later providers lending up to $30,000, it’s unfair and unsafe to allow them to avoid safe lending laws. They need to operate on a level playing field with credit cards and personal loans. As cost of living pressures rise, it is even more important that people are protected from rogue lenders,” said Alan Kirkland, CHOICE CEO.
“A broad sweep of stakeholders agree that BNPL needs to be fully regulated as credit. The Government must act to close this regulatory loophole now and make sure the same guardrails apply to BNPL as apply to other types of personal credit,” said Karen Cox, Financial Rights Legal Centre CEO.
