HomeMedia & ResourcesMedia ReleasesCOBA welcomes APRA's announcement on treatment of loan repayment deferrals

COBA welcomes APRA's announcement on treatment of loan repayment deferrals

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The Customer Owned Banking Association welcomes APRA’s announcement today on loan repayment deferrals.

“This gives all banking institutions, including COBA members, continued flexibility in the regulatory framework to assist in dealing with customers affected by the COVID crisis,” said COBA CEO Michael Lawrence.

“APRA’s regulatory treatment is an important factor for COBA members in responding to their customers but it is not the only factor. The most important factor is what is best for each customer. For customer owned banking institutions, the customer always comes first.

“Today’s announcement gives banks more flexibility to help their customers – whether through an additional repayment deferral or through modified repayments on a restructured loan.

“This is welcome flexibility for banks because for some borrowers it may be beneficial to be making repayments on an interest only basis or over a longer term.

“Importantly, APRA’s expectation is that banking institutions do not grant blanket extensions.

“Banks and borrowers must determine what is appropriate, given the particular circumstances of the borrower. Deferring repayments is not always in the best interests of the borrower.

“This underlines the challenge to COBA members and all other banks to prioritise time and resources to sensitively deal with all borrowers who have obtained or requested deferrals.

“COBA members are working closely with their customers and encouraging customers who are in position to resume repayments to do so.

“While some customers can resume repayments under current or restructured arrangements, other customers remain affected by the terrible uncertainty of the crisis and will need more time.

“This extension of APRA’s regulatory approach gives COBA members and their customers welcome breathing space to have these conversations. COBA appreciates APRA’s engagement with our sector in drafting its updated regulatory approach.”

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Ashley Penny
Corporate Affairs Manager
P: +61 2 8035 8444
M: +61 431 932 950
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