Hardship provisions: Application fees and disclosure
View whole document on one page
View the whole document as a PDF
| Q.12 Do you agree that hardship application fees should not be permitted? Should refinancing fees not be permitted when a consumer is in a situation of unforeseen financial hardship? |
The submissions generally supported across the board that hardship application fees should not be permitted, though some lenders did not support the proposal, citing hardship applications attract business operating costs. A bank noted that charging fees for hardship was immoral and counterproductive.
With regard to refinancing fees, lenders generally submitted that they should be able to be charged where further credit is extended to the borrower as such transactions attract operating costs. They noted the fees would of course be subject to the reasonableness test of the Act.
Consumer representatives supported the proposals.
| Q.13 Do you support the addition of information in the credit contract disclosure about hardship applications? |
There was general support for the above proposal though its effectiveness was questioned with the reasoning that if the group intended to be helped by hardship proposals was not aware of them and did not read the disclosure they would not be likely to benefit from the additional disclosure.
One bank suggested this disclosure be voluntary and outside the time of initial disclosure.
