Will they or won't they? Will the responsible lending reforms pass the Senate?

By Dominique Logan, Kerensa Sneyd, Adriano Carnevale

Timeline of key events

We have previously covered the 'wind back' or 'axing' of the responsible lending obligations via the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 (Cth) (the Bill), with our most recent article on the Bill signalling the progression of the Bill through the Senate. For the Bill to pass the Senate, it will need the backing of three of five crossbenchers.

Recent media coverage indicates that neither Senator Pauline Hanson nor Senator Jacquie Lambie will support the Bill. Therefore, whether the Bill will pass hinges on whether independent senator Rex Patrick, and Centre Alliance will support the Bill – given Centre Alliance MP Rebekah Sharkie voted against the Bill in the House of Representatives, it is unclear whether Centre Alliance will support the Bill in its current form in the Senate. At this stage, barring Pauline Hanson and Jacquie Lambie changing their positions, the Bill is unlikely to pass in its current form.

Ahead of the next Senate sitting on 15 June 2021, we have prepared a short timeline summarising the history and progression of the Bill, along with relevant commentary and supporting material.

History and progression of the Bill

Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry

1 February 2019

Royal Commission recommendation on the NCCP Act

Recommendation 1.1 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry is 'the NCCP Act should not be amended to alter the obligation to assess unsuitability' with respect of consumer lending.

Bill moves through House of Representatives

9 December 2020

Bill is introduced and read for the first time in House of Representatives.

12 March 2021

Senate Economics Legislation Committee produces their report and recommends that the Bill be passed

The committee notes that the current consumer credit protection framework is potentially overly prescriptive and that regulatory duplication between the responsible lending obligations, under the NCCP Act, and the prudential standards issued by APRA could be an issue. The committee also notes that the principal of 'responsible lending' is deeply embedded in Australia's broader regulatory framework, which credit providers and credit assistance providers must still operate within and comply with.

The committee expressed concern that the existing regulatory framework has resulted in consumers being unable to access credit in a timely manner; and with respect to the invasive and onerous nature of the inquiry and verification processes required under the existing responsible lending obligations.

15 March 2021

Bill passes House of Representatives 

Bill reaches the Senate

16 March 2021


Bill introduced to the Senate

The Bill is introduced and read for the first time in the Senate. With Labor opposed to the Bill, the Coalition needs support from three of the five Senate crossbenchers for the Bill to pass. 

18 May 2021


Labor's opposition to the Bill

Shadow Finance Minister Stephen Jones reiterates Labor's opposition to the Bill in his Address to the Australian Finance Industry Association.

19 May 2021

Pauline Hanson confirms lack of support

Pauline Hanson confirms in a media interview she would not support the plan, describing it as against the best interests of millions of Australians.

Keeping in mind the Coalition needs the support of three of the five Senate crossbenchers, Pauline Hanson confirms that she would not support the Bill.

At this stage, Independent Tasmanian Senator Jacqui Lambie is reportedly against the change, and South Australian independent Rex Patrick said he was unconvinced because lending data did not show the responsible lending rules had hurt borrowers. Centre Alliance is yet to finalise its position in the Senate, but its MP Rebekah Sharkie voted against the plan in the lower house – a potential signal of the party’s final position.

21 May 2021


Josh Frydenberg's pledge to push on

Treasurer Josh Frydenberg has pledged to push on with the Coalition’s attempt to scrap responsible lending laws, seeking a deal from the Senate crossbench despite strong opposition from Pauline Hanson.

27 May 2021


Jacqui Lambie indicates that she will vote against the government's plans to axe lending laws

Tasmanian Senator Jacqui Lambie indicates that she will not support the Bill, saying the legislation is 'dead in the water'.

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