Additional Comments by Senator Cameron
As a matter of general principle, I agree that this committee cannot and
should not act as a court or tribunal in which legal disputes between aggrieved
borrowers and their lenders that pre-date this inquiry can be prosecuted.
I do however harbour grave concerns about the evidence before this
inquiry concerning the conduct of financial institutions in relation to what
are known as low-doc loans. There is no doubt in my mind that a number of
institutions behaved in varying degrees to the detriment of their borrowers and
in some cases, if the evidence is correct, with a reckless indifference to the
ability of some of those borrowers to actually repay the loans extended to
them. As a result, many individuals have and will continue to suffer financial
hardship, stress and related illness.
I sincerely hope that in cases where the judicial process takes its
course in relation to these matters, that financial institutions found to have
not behaved in accordance with the law, equity or good conscience are severely
punished and restitution is awarded to those individuals and businesses on
which they have inflicted financial harm.
I note that the financial harm inflicted on a number of borrowers who
made submissions to the inquiry has had the effect of putting the prospect of
them taking what might be well-founded legal action against lenders beyond
their financial means. In my view this heaps injustice upon injustice.
While I accept that the predatory lending practices complained of during
the course of this inquiry have fallen somewhat into disuse both as a result of
the GFC and changes to consumer credit laws, I am not prepared to accept that
such practices would not re-emerge should financial and economic conditions
return to their pre-2008 state sometime in the future.
One thing that legal action, either on behalf of individuals or in the
form of a class action will shed light on, is the robustness of the law
providing consumer protection against the type of lending practices complained
of at length during this inquiry.
I will continue to monitor closely the outcome of any legal actions
taken in relation to low-doc loans or predatory lending and encourage the
government to do likewise with a view to ensuring that consumer credit laws
offer robust protection to lenders who might otherwise fall victim to the
practices of financial institutions that became prevalent prior to the GFC.
Senator for New
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