It says as an industry it supports measures to protect consumers and it understands the law changes were intended to do just that.
But the detailed information on spending habits demanded of would-be borrowers is backfiring, the organisation says.
It says borrowers who could previously obtain finance and service those payments for their home are often locked out of obtaining finance in the future.
In a letter, the organisation’s chief executive Katrina Shanks cites the example of a person who tried to obtain a mortgage after a separation being declined due to not meeting the new affordability criteria.
The consideration for the declined application included a number of takeaways on their bank statement being classified by the lender as non-discretionary food instead of discretionary.
In the same example judgment calls were being made by the lender that purchasing one Lotto ticket in three months was excessive and was considered gambling.
The applicant had two children and the lender considered they proved to be a financial burdon, even though the same two children existed before the act was passed.
In another case, a was preapproved for $950,000 with sound servicing. Due to the changes in regulations, they can now borrow only $800,000 despite strong stable incomes.
Shanks says the minister should agree to meet to discuss these impacts on ordinary people.