A "sensible, balanced approach to the application of responsible lending laws so that they do not unnecessarily constrain the free flow of credit," is the latest plea from treasurer Josh Frydenberg at a property industry summit yesterday.
The government appears to intend to unsettle the supply side (banks) almost as much as those financial regulators that have been copping blame (for 18 months now) over what is - as the RBA governor Philip Lowe said the other day - a demand side curb on the flow of credit.
In a speech strangled by the Morrison's government rhetoric of "a strong economy", Frydenberg in the end aimed his main barb once more at ASIC and the Council of Financial Regulators.
"Should responsible lending laws be applied too stringently," he argued, 'they will also negatively impact consumer behaviour, with consumers more likely to remain with their current provider than go through the red tape burden associated with looking for alternatives."
Pointing out that since 2009, ASIC has adopted a principles-based and scalable approach," Frydenberg might as well have said straight out he demanded a politically-based approach.
Ten years of the policy enacted in the National Consumer Credit Protection Act, he said, "has allowed flexibility for lenders to appropriately take into account the facts and circumstances of each case and vary the degree of inquiry and verification depending on the customer risk involved.
"Common sense dictates that a sensible balance needs to be struck because an unduly restrictive application of these obligations can do as much harm as an overly lax one.
"Clearly, the risk that the provision of credit may cause substantial hardship to some should not result in a significantly reduced ability to access credit by the vast majority of consumers," Frydenberg said.
Demand indicators are on the move in housing in Australia, a little more than most realise.
Lisa Claes, CEO of CoreLogic, in an interview with Banking Day following the treasurer's speech said that "our valuation platform data shows the highest growth in residential revaluation events since 2017."
This reflects demand on the lending side.
"The Westpac consumer confidence index measure of house price expectations has risen 3.9 per cent, it's very much a post-election turnaround," Claes said.
And as reported in more detail today in Banking Day, mortgage debt is growing faster than the value of residential land and dwellings, the ABS finance and wealth data shows.
On the supply side, business models and the efficiency of all links in a complex chain explains some of the subdued credit flows that bother Frydenberg.
"Responsible lending is not an issue," CUA's CEO Rob Goudswaard said yesterday. Constrained by a replacement project on mortgage handling he said that "we spend a lot of time do credit assessment. For us, scalability has always been an issue."
Garden variety home loans take up to 24 hours to process at CUA, and if a trust or guarantee is part of the mix it may take 2 days," he said, a timing well outside fintech best-practice but not unusual either.
The CUA annual result for 2019 (also reported at length today, here) lends support to both the supply side and demand side forces; "loans approved not advanced" more than halved to $192 million.