The latest change to consumer credit law will give external dispute resolution schemes an inappropriate amount of power to review lenders' decisions in hardship cases, according to a leading banking lawyer.Among the changes to the National Consumer Credit Protection Act included in an amendment bill passed in the Senate this week are measures that make it easier for debtors to seek a variation of repayments under their credit contracts because of financial hardship. The hardship measures have been a sleeper, while other changes to the NCCP Act, such as the payday lending rules and new rules for reverse mortgage lenders, have captured most of the attention. Under the provisions of the Consumer Credit Legislation Amendment (Enhancements) Bill 2012, which take effect on March 1 next year, all debtors have a right to request a hardship variation, irrespective of the size of their loan. Under the current law that right is only available when the debt is less than $500,000.There will be no limits to the forms of hardship variation. Under the current law, the Credit Code sets out a limited number of possible contract variations.Credit providers will have to respond to an application for a hardship variation before commencing enforcement proceedings. Under the current law credit, providers are not required to respond to an application for hardship variation before commencing enforcement proceedings.Borrowers will no longer be required to put their application in writing. Lenders will be obliged to accept either oral or written submissions.If a credit provider does not agree to change a credit contract, it will have to issue a notice giving its reasons and alerting the borrower to his or her rights to lodge a complaint through an external dispute resolution scheme.Gadens Lawyers partner Jon Denovan said: "An EDR scheme should only be allowed to look at whether the lender went though the hardship process properly."It should not be able to make a determination about whether the credit decision was the right one. This amendment gives EDR schemes the power to second-guess credit providers on their hardship decisions."