Rebekha forges ahead with rural finance reform campaign
Posted March 06, 2019
A Private Member’s Bill to reform the rural finance sector, put forward by the Federal Member for Mayo Rebekha Sharkie, has been referred to a parliamentary committee for consideration.
The House of Representatives Standing Committee on Economics will now examine the Banking Amendment (Rural Finance Reform) Bill 2019, a piece of legislation reintroduced to the parliament last month by the local MP in the wake of the findings of the Banking Royal Commission.
For the purposes of the inquiry, Rebekha has also been made a supplementary member of the committee which is chaired by Liberal MP Tim Wilson with Labor MP Matt Thistlethwaite the Deputy Chair.
“My Private Member’s Bill is the same legislation I introduced in February 2018 and aims to protect small farm properties valued at under $5 million from ‘arbitrary and draconian’ lending practices,” said Rebekha, Centre Alliance’s Spokesperson for Agriculture.
“Back then I introduced the legislation as a direct response to the Government’s own inquiry into banking and the rural sector.
“I then went to the National Party and said: 'This is your constituency. This is my constituency. We need to make a change.' And I heard nothing.
“The Banking Royal Commission has changed attitudes since then, and I want that momentum to bring about reform.
“The banks have behaved badly, and this bill addresses the real problems affecting the rural finance sector.
“I welcome the decision to refer my Private Member’s Bill to the House of Representatives Standing Committee on Economics for consideration.
“It’s another step forward towards creating protections for our mum and dad farmers whose businesses are also their homes.”
The Banking Amendment (Rural Finance Reform) Bill 2019 seeks to take a measured approach to level the playing the field by:
- Requiring financial institutions (including banks, building societies and credit unions), to provide simple, one-page summaries of the clauses that may trigger a non-monetary default by the borrower;
- Prohibiting institutions from unilaterally undertaking a valuation of security to a loan;
- Requiring institutions to provide six months’ notice before seeking to unilaterally vary conditions of the loan, except where it is a change in the money payable by way of a reference rate or it is to the borrower’s benefit, and except where the borrower has substantively breached the loan agreement;
- Requiring institutions to provide notice and request to meet with the borrower at least six months prior to the expiry of the loan;
- Prohibiting the use of catch-all ‘material adverse change’ (contingency) provisions, except where they relate to alleged fraud or criminal misconduct;
- Requiring institutions to provide a minimum of ‘90 business days’ notice where a loan is not going to be extended or renewed;
- Requiring institutions to inform the borrower about their rights to external dispute resolution when the borrower receives a default notice from the bank, or when the borrower is in financial hardship and is declined assistance from the bank, or when the institution refuses to renew or extend the borrower’s loan.
“My bill takes a reasoned, measured approach to lending and to levelling the playing field between lender and lendee because we want to make sure banks are still willing to lend money to farmers,” Rebekha said.
“I am also convinced that the impotence that farmers feel when faced with arbitrary and draconian decisions about their loan agreement is detrimental to the mental health of our rural community.
“This issue causes more farmers to take their lives than any other so action needs to be taken.”