Consumer groups are urging the government not to shelve its financial reform bill or risk more vulnerable people falling victim to dodgy lending practices.
The bill, which addresses several outstanding recommendations from the royal commission into the sector, has reportedly been put on ice after a Greens-instigated amendment sparked concern from the financial industry.
The amendment would open bank executives to individual fines of up to $1.1 million for failing to adequately protect consumers
But Assistant Treasurer Stephen Jones has since put the bill on hold to allow further industry consultation, which means less controversial parts of the bill, such as payday lending reforms, have no chance of making it into legislation before the end of the year.
Several consumer interest groups, including Consumer Action Law Centre, CHOICE and Anglicare, have joined forces urging the government not to hold back the bill, noting that these reforms have been delayed repeatedly for six years.
"We are urgently calling on the Senate to pass the bill before Christmas," the Consumer Action Law Centre's Gerard Brody told AAP.
"This is an omnibus bill that does other important things as well including dealing with harmful exploitative lending like payday lending."
Without the legislation, consumer groups are worried more people will turn to payday lenders, which offer consumers fast cash but typically charge super-high fees and excessive interest rates, to cope with the rising cost of living.
Mr Jones said the government was committed to delivering a financial accountability regime as outlined in the bill but wanted to consult further with consumers and businesses.
"We have taken a step back to consider the concerns raised in the Senate, and engage in further consultation on the details of the legislation," he said.
"We will continue to work with consumers and business to make the right decisions for the right reasons."
He said the government would aim to pass the legislation in early 2023.
