Queensland banks say the car loan loan scheme is ‘a little too much’
A Queensland bank says it has been hit by a spate of negative news stories about the car loans scheme, saying the industry is “too big” for the state’s financial sector to manage.
Key points:The banks say there is no evidence the scheme has been underperforming in terms of the number of car loans it has received from the state or the amount of money it is paying out in interest over the past 12 monthsThere are also concerns the scheme is “a little bit too much” in terms.
Queensland Banking Association president Craig O’Brien said in a statement it had been hit with a barrage of negative stories about car loans over the last 12 months, with the total amount of loans received by the bank totalling about $3.8 billion.
“While the total number of loan applications is not a reflection of how many car loans have been made, it does provide a snapshot of how well the system has been performing,” Mr O’Briens said.
“The number of applications received by our lending scheme is significantly lower than the total capital it holds in our reserves and it is very concerning that this has occurred at a time of heightened economic uncertainty and the introduction of a $10-a-week income tax.”
The association said the scheme had been criticised for its low number of applicants, but also for the high number of loans it is required to approve.
“We have been informed by our bank that the current situation is very much a concern for our lenders and our customers,” Mr Darnell said.
He said the current number of lenders was “well below the level that we would expect if there was no increase in the cost of borrowing”.
“Our banks have been told by some lenders that they are not being prepared to provide the full range of support needed to maintain their business.”
Mr O’Brian said Queensland was working with the Reserve Bank to determine how the industry was being managed.
He also said the association would continue to work with the regulator to “help ensure Queenslanders are able to access the best available financial services”.
“We will continue to provide as much support as we can to the banks in this situation,” he said.
Read more about car loan: Queenslanders have been left to fend for themselvesDespite the high numbers of negative reports, Queensland’s banking association said it was confident the industry had been managed and the government had been clear on the matter.
“Queenslands has one of the best car loan and loan servicing systems in the world, and we have no doubt that this is a case of a little too big for the financial sector,” Mr Doran said.
“Queyslanders have taken responsibility for our own finances and that is the biggest issue that we need to address in terms that will ensure Queenslandans can access the services they need and that they can access them well.”
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