Govt overhauls consumer credit regulation
Friday, 3 October 2008 12:50pm
The Rudd Government is set to introduce radical reforms in consumer credit, including a national licensing regime for all credit providers such as mortgage brokers and new rules on margin lending and reverse mortgages.
Today the Government said it will spend $71 million under a two-phase action plan to clamp down on predatory lending practices. This includes protecting consumers from dodgy mortgage dealers and unscrupulous ‘payday lenders'.
In phase one of the action plan, which should be in place by mid next year, the Commonwealth will now assume responsibility for key credit regulation, the Uniform Consumer Credit Code (UCCC) - replacing existing State legislation.
Finance regulator ASIC will wield more power under the new regime with the Government requiring all providers of consumer credit and credit-related brokering services and advice to obtain a licence from ASIC.
Property and share investors will also benefit from the reform package as existing rules will be extended to cover margin lending and loans extended for investment properties.
Under phase two, which should be in place by mid 2010, the Government will also enhance regulation surrounding reverse mortgages and against predatory lending practices such as unsolicited credit card extension offers.
"In just 10 months we have acted to see that our financial services will be regulated nationally and consumers will be better protected," Minister for Superannuation and Corporate Law Nick Sherry said.
Michelle Baltazar
This story was found at: http://www.financialstandard.com.au/news/view/24180
Printed: Tuesday, 6 January 2009 4:13pm