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National Consumer Credit Regulation

Applies to all consumer finance brokers, advisers and credit providers, including margin lenders


What's new?

The Government has released its two phase action plan on how it intends to implement the transfer of state and territory based consumer credit regulation to Commonwealth jurisdiction.

Phase one is expected to be in place by the end of June 2009, with a two year transition period for affected businesses. Some of the key elements of this phase include:

  • Enacting State and Territory legislation (the Uniform Consumer Credit Code (UCCC)) into Commonwealth legislation
  • Establishing a national licensing regime for credit providers, advisers and brokers, regulated and enforced by ASIC
  • Extending regulation of mortgages from residential to include investment properties
  • Regulation of trustee corporations
  • Including the regulation of margin lending in the scope of the Corporations Act

Phase two is expected to be in place by mid 2010, some of the key elements of this phase include:

  • Investigation into possible further rules to stem predatory lending practices such as credit card limit extension offers and other fringe lending practices as they arise
  • Regulation of provision of credit for small businesses
  • Regulation of investment loans, other than margin loans and mortgages for residential investment properties
  • Reform of mandatory comparison rates and default notices
  • Enhancements to regulation and tailored disclosure of reverse mortgages
  • Review of remaining state and territory reform projects

How does this apply to you?

As a finance broker, adviser or credit provider, you will fall under the requirement to be licensed by ASIC. As a licensee you will have certain obligations, including:

  • meeting general conduct requirements, including responsible lending practices, and
  • mandatory membership of an External Dispute Resolution (EDR) scheme

Further information

For advice on whether this may apply to you, and to help you understand and comply with the obligations of licensees, please contact your Certainty consultant at (02) 9238 8091 or enquiries@certaintycompliance.com.au

Joint Media Release, Prime Minister & Assistant Treasurer and Minister Competition Policy & Consumer Affairs: New Measures for Australian Financial Services

National Consumer Credit - single, standard, national regulation of consumer credit for Australia: Two Stage Action Plan