Advisers hopeful about Aussie lending changes

Kiwi mortgage advisers are hopeful that Australia's move to scrap responsible lending rules will lead to changes here.

On Friday, Australia's government relaxed responsible lending laws, making banks subjects to less onerous oversight. 

A slashing of red tape, designed to stimulate the economy, will remove the Australian Securities and Investments Commission (ASIC) from enforcing responsible lending laws.

Australian treasurer Josh Frydenberg called the changes "the most significant reforms to Australia's credit framework in a decade".

The rules have long been blamed for overly-conservative lending by the Australian-owned big four lenders. 

Brokers hope the Aussie changes will lead to a rethink on mortgage lending in New Zealand. 

NZ lenders remain subject to the Responsible Lending Code, which requires banks to ask highly-detailed questions to borrowers.

Stephen Wilton of The Advice Group said the Code had hurt clients and borrowers over the years.

"The RLC has forced lenders to use a calculator as the yes or no tool and not considered the liquidity of assets and quality of the clients," Wilton said.

"We have been struggling to get them to make the supportive lending decisions that are in the best interests of clients.”

NZFSG's Bruce Patten said the Australian government's decision was "interesting", considering the legal battles caused by the rules. Westpac has been hit with class action lawsuits over breaching responsible lending laws in recent years.

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