Australia’s big lenders have been urged to support financially stretched customers as cost of living pressures take a toll.
The Australian Securities and Investments Commission has sent an open letter to 30 of the nation’s largest lenders to remind them to help struggling customers appropriately.
The letter, which was sent to the big four banks and many others, pointed to mounting evidence of financial distress and hardship.
A slew of surveys have indicated high levels of consumer stress and the National Debt Hotline has reported a 28 per cent increase in calls compared to 12 months earlier.
ASIC commissioner Danielle Press said the economic environment had shifted over the past year and it was putting households under pressure.
“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,” she said.
The regulator called on banks to proactively communicate with customers about how they can seek assistance and find tailored solutions for those struggling.
ASIC has started reviewing the financial hardship response of the 10 large home lenders and the results will be released next year.
The pressure felt by Australians at the checkout will be on display when the Australian Bureau of Statistics releases its monthly inflation data on Wednesday.
Markets are expecting a 5.2 per cent annual lift in inflation, which would mark a further softening from 5.4 per cent in the 12 months to June.
While this would be well below the 8.4 per cent peak in December, it would still be much higher than the Reserve Bank’s two-three per cent target range for inflation.
The central bank has been jacking up interest rates in response to fast-rising inflation but has left the cash rate on hold for two consecutive months.
But the RBA has kept further increases on the table and signs of persistent inflationary pressures will add to the case for more tightening in coming months.
In a speech on Tuesday, RBA deputy governor Michele Bullock gave little away about the short-term trajectory for interest rates.
“All I can say is we might have to raise interest rates again, but we’re watching the data very carefully,” she said.
New construction work done and building approvals data will also be released on Wednesday.
Poppy Johnston
(Australian Associated Press)
