Treasurer Josh Frydenberg announced on Friday that the government will maintain the exemption from responsible lending obligations for lenders providing credit to existing small business customers.
The exemption applies to any credit for business purposes, including new credit, credit limit increases and credit restructures.
The exemption was introduced as a temporary COVID relief measure in March last year but is now being tied to the government’s plan to change responsible lending rules.
Frydenberg said the exemption will remain in place “until the government secures passage of its credit reforms through the Senate”.
The National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2019, which removes the responsible lending provisions from the Act except where they apply to high-risk lending, was passed in the House of Representatives last Monday and is now in the Senate.
The bill’s likely fate in the Senate is unclear. The Senate Economics Legislation Committee recommended that the bill be passed but Labor and Greens senators on the committee issued separate dissenting reports.
Last week, all parliamentarians received an open letter opposing the amendment, signed by 33,000 people and 125 community organisations.