Banking reforms will help hard-up families, says union

The federal government's new package of banking reforms will radically improve the lives of working families struggling to meet high home loan costs, the Australian Workers Union (AWU) has said.

Writing in the Herald Sun, Paul Howes, national secretary of the AWU, argued that despite criticism of the measures from figures such as shadow treasurer Joe Hockey, the government should be given credit for taking the radical step of banning all mortgage exit fees from July 1st next year.

Indeed, he claimed that such a reform would make it easier for consumers to compare home loans and switch to a new option if they find they can get a better deal elsewhere.

"This will, naturally, make banks far more reluctant to increase interest rates above that of the Reserve Bank when they know their customers can simply move to a non-gouging financial institution," he said.

The reform package has been the subject of much fervent debate, with some figures claiming that the plan to turn the mutual sector into a more competitive "fifth pillar" of banking is unworkable.

Among the other measures in the reform package are rules preventing banks from signalling their rate movements ahead of time.

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