Under new laws, lenders who push credit cards or credit limit increases onto consumers who cannot afford them will lose their licences.
The Federal government yesterday announced the changes to lending regulations which will be introduced in September. This follows agreement by the states after seven months of negotiations to hand over the regulation of credit providers to the Commonwealth.
Currently, credit providers are not obligated to investigate the consumer's capacity to repay a debt.
The new regulations will be policed by the Australian Securities and Investment Commission, who will be given powers to impose fines and revoke the licenses of repeat offenders.
Consumer groups predict the move will lead to tougher eligibility criteria and increased scrutiny of borrowers' income, assets and liabilities when applying for credit cards.
