Shane Rattenbury has written to Treasurer Josh Frydenberg saying the changes put vulnerable people at risk of getting snowed under in unaffordable debt.

He said the proposed new laws also contradicted voting outcomes from the national forum of consumer affairs ministers.

The federal government's proposal would axe laws introduced by Labor in 2009 after the global financial crisis.

Mr Frydenberg in September said the proposed reforms would make it easier to access credit, boosting the economy through increased consumer spending and creating jobs.

Mr Rattenbury said the current laws were designed to protect predatory loans, debt and financial hardship.

"The federal government is attacking vulnerable people from all sides," he said.

"The government's income support system already hurts the people who have the least, leaving them struggling to meet the basics and having to choose between necessities like food, rent and healthcare.

"Now it wants to compound that disadvantage by removing the responsible lending laws that protect people from receiving unsuitable and unaffordable credit. This is exacerbated by the COVID-19 pandemic which has left many people experiencing financial uncertainty."

Mr Rattenbury said the proposal specifically contradicted the recommendations of the banking royal commission, which said a bank's obligation to assess whether a customer was suitable for a loan should not be removed.

"The federal government needs to ensure consumers cannot be pushed into unaffordable, unsuitable, or unsustainable credit arrangements," he said.

Mr Rattenbury also chairs the Legislative and Governance Forum on Consumer Affairs, which is made up all relevant state and territory ministers.

The letter sent to Mr Frydenberg, seen by The Canberra Times, Mr Rattenbury said he was disappointed integral positive reforms called and voted on by the forum were removed in the new bill.

"It is clear the 2020 National Consumer Credit Protection Amendment Bill remains incongruous with the voting outcomes at [the forum] and the recommendations arising from the 2016 review into the sector," he said.

ACT Council of Social Service chief executive Emma Campbell said the current laws protected vulnerable Canberrans from unscrupulous lenders.

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"The removal of [responsible lending laws] will drive irresponsible lending to vulnerable households as people desperately try to access funds to cover basic costs of living," she said.

"During the COVID-19 pandemic we saw a significant increase in the number of vulnerable, disadvantaged, and low-income households in the ACT. The number of people in the ACT receiving income support while looking for work is currently double what it was 12 months ago."

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