Yahoo Finance Big banks put on notice in powerful open letter
Banks have been warned they are under the spotlight when it comes to customers dealing with financial distress.
Australia’s biggest banks have been put on notice by the financial regulator - the Australian Securities and Investments Commission (ASIC) - over their handling of the cost-of-living crisis.
ASIC sent an open letter to 30 lenders, calling on them to make sure they appropriately supported customers experiencing financial hardship.
ASIC said it had seen evidence that an increasing number of Aussies were experiencing financial distress and difficulty due to cost-of-living pressures.
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ASIC said it was “critically important” that lenders had appropriate arrangements to respond to and support consumers experiencing financial hardship.
“The economic environment has shifted over the last year, placing significant financial pressure on everyday Australians,” ASIC commissioner Danielle Press said.
“ASIC reminds lenders that they must have the right arrangements in place to respond to requests for assistance from customers experiencing financial hardship, and to work constructively with them to find a sustainable solution.”
In the letter, ASIC set out expectations of lenders to meet their obligations. These included:
Proactively communicating how and when customers can seek assistance
Genuinely considering customer circumstances to develop sustainable solutions where possible
Communicating regularly with customers throughout and at the end of the assistance period
“ASIC expects all lenders to seriously consider the expectations outlined in our letter, and to take the necessary action to ensure they fulfil their obligations in supporting their customers,” Press said.
ASIC warned the lenders that, in response to higher interest rates and cost-of-living pressures, financial hardship would be an area of increased focus over the next 12 months.
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