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Fears overhaul of home loan and credit rules will fuel irresponsible lending

It will soon be easier for Australians to take out mortgages and personal loans under credit law changes designed to mitigate the impact the COVID-19 pandemic has on the economy.

Treasurer Josh Frydenberg announced the simplification of lending rules on Thursday.

But consumer groups are concerned the overhaul to lending laws will actually harm Australians and the economy.

Financial Counselling Australia’s Fiona Guthrie says the reform will open new opportunities for banks to aggressively sell debt.

“It probably means it will be easy to get too much money and we’re really worried … that it will lead to more irresponsible lending and more over-commitment,” she told Neil Mitchell.

“The responsibility is moving off banks to check affordability.”

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