Banks are making it harder for consumers to get car loans, credit cards and personal loans following the royal commission concerning bank lending practices. 

The Australian Securities and Investments Commission outlined their concern on the responsible lending and assessment practices. 

“While we believe mortgage credit underwriting standards have improved in recent years, we see further underwriting process tightening in other lending categories (for example, personal loans and credit cards,” Macquarie analysts said. 

Responsible lending guidance will change the lender’s assessment process for loans for consumers and apply comprehensive credit reporting (CCR). For lenders, this will provide more information on the consumer, their financial history and possible debts. 

Further, banks will be required to provide “positive” credit information, including how frequency consumers paid their bills on time. 

“This should not result in significant implications for the majors, but will likely impact smaller credit providers significantly,” the analysts said. 

Banks and non-bank lenders will both have to apply the recommendations made by the royal commission. 

Some believe this will be beneficial to big banks, because the new rules to tighten their processes are expected to be followed by small non-bank lenders, similar to what the banks have already been doing. 

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