The Mortgage and Finance Association of Australia (MFAA) believes the Federal Government should regulate predatory lenders in the low documentation (low-doc) loan market.
"We have lobbied the Federal Government since 2002 to regulate these predatory lenders who have been selling low-doc loans to people who are unable to afford them," MFAA chief executive Phil Naylor said.
Naylor's comments follow an interview Treasurer Peter Costello gave on the Ten Network where he warned states about lenders in this market.
"I am very concerned that some low-doc lenders may be pushing money on to people who they know are bad risks and I want to see that end," Costello said.
"In 2006 the states met to talk about getting a uniform law. It is time that this is brought forward. It is time that the states enact a uniform law.
"We would say to the states that if they want to refer powers to us then we would be willing to step in and take their powers and to legislate in this area."
While the MFAA has lobbied the states on this issue, Naylor said the association's first preference would be to regulate the lenders at a Federal level.
"There may only be a few predatory lenders in the market but they are causing a lot of problems for the industry as a whole," he said.
