The Australian Securities and Investment Commission (ASIC) has released a new report on credit card lending.
The report notes that major banks have agreed to improve credit practices.
The latest report is an update to the one released in July this year which revealed that more than one in six consumers is struggling with credit card debt.
Following the report, ASIC reached out to ten major credit providers in Australia and sought their commitment for responsible practices to tackle rising debt.
The major financial firms which have agreed to implement better practices include American Express, ANZ, Bendigo and Adelaide Bank, Citigroup, CBA, HSBC, Latitude, Macquarie, NAB and Westpac.
Out of the credit card providers contacted, nine committed to take proactive measures to help consumers having problematic credit card debt, the regulator said.
While four intend to provide ‘fairer’ approaches for balance transfers, nine committed to lower the amount by which cardholders can exceed their credit limit.
Macquarie, CBA and HSBC are said to be the most progressed with enforcing the changes associated with credit card lending.
ASIC noted that American Express has committed to certain changes, but others have proposed more comprehensive measures.
ASIC commissioner Sean Hughes said: “ASIC expects that all credit card lenders will address the issues raised in our review.
“We will be monitoring lenders over the next two years to make sure they have taken action to address our concerns, and to ensure that consumer outcomes are improving in the credit card market.”
The regulator plans to perform a follow-up review for any improvement in consumer outcomes. ASIC added that if necessary, it would use enforcement powers to ensure the required changes.