Login
COVID-19 no excuse for 2nd-year delay, ALA says
On the second anniversary of the financial services royal commission, a peak body for Australian lawyers has called on the federal government to stop using COVID-19 as an excuse for why the recommendations have not yet been implemented.
Naomi Neilson
The failure to implement commissioner Kenneth Hayne’s 76 recommendations for yet another year has let down super fund managers, bank customers and insurance policyholders, according to the Australian Lawyers Alliance that criticised the government for ignoring most and completely abandoning others.
Mr Mennen added that two years have been “more than sufficient time” to implement the recommendations, which were made based on extensive hearings that revealed shocking corporate misconduct at the expense of vulnerable or disabled customers.
The long-promised compensation scheme of last resort is one of the many recommendations that have not yet been introduced and could have been used over the last two years to help consumers who have proven they were given negligent financial advice only to find that the advice firm has gone under and cannot pay up.
Mr Mennen said this compensation scheme would have been “invaluable” for those who have struggled during high unemployment and economic turmoil of COVID-19.
“It is unbelievable that some of the recommendations have been abandoned such as the ban on mortgage brokers receiving commissioners from lenders – a practice which incentivises brokers to load customers up with excessive mortgages and unsustainable debt,” Mr Mennen criticised.
In the case of responsible lending reforms, he said that government has “defied” Commissioner Hayne’s directions with legislation currently before Parliament that aims to axe the bank’s obligations to make enquiries and verify whether consumers can afford the loan.
“This is a recipe for financial hardship,” Mr Mennen said.
“Aspiring home-owners should be given support and guidance in understanding their credit limitations. Instead, they will have unprecedented access to credit with minimal accountability for banks and brokers who are riding high on an already inflated property market.”
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
