FIRST Union has called for new anti-loan shark legislation to remove sales targets pressure from the lending process.
In a submission to the Ministry of Consumer Affairs on the Credit Law Exposure Draft, FIRST Union called for a new clause to be added to the responsible lending provisions to “ensure that the nature of any lending proposal from a lender is based on the needs of the borrower and is fit for that purpose and is free from influence of the lender’s own business goals, objectives and / or practices.”
FIRST Union Finance Secretary Andrew Casidy said there were significant concerns about the use of sales targets by lenders in all financial institutions including registered banks and that all targets must be fully disclosed to all customers as they work against all the other fair lending provisions. “Staff of lenders are often placed in the insidious position of having to meet customer needs as well as lenders debt targets. Their jobs are literally ‘on the line’ if they don’t meet the targets established by lenders deemed necessary to meet their profit objectives.”
“This creates a significant conflict between a staff member’s obligation to their customer and their obligation to their employer.”
FIRST Union will have another opportunity to comment on the legislation when the bill goes on to be discussed in parliament.