The plans for national regulation of mortgage and finance brokers took another step in the right direction at last week’s Council of Australian Governments’ (COAG) meeting when the states and territories agreed the federal government would present a paper on a uniform, nation-wide legislation by October.
The various state governments agreed in principle the federal government should take the regulatory responsibility for consumer protection for mortgage credit and advice as well as margin lending.
Although few details were revealed from the meeting, the meeting agreed on the timeframe for completion of the various components to formulate the regulatory framework for the legislation.
Phil Naylor, Mortgage and Finance Association of Australian (MFAA) chief executive officer, told Lending Central not enough details about the federal government’s approach to the legislation had come out of the COAG meeting, but ‘at least (the national regulation) is going to be dealt with by a federal authority’.
Mr Naylor and MFAA have already been in discussions with Nick Sherry, Minister for Superannuation and Corporate Law, in an effort to find what MFAA can contribute to the process.
Mr Naylor was encouraged by the decision from the various state and territory governments at the COAG meeting and hoped the federal government would use of the framework for the newly released exposure draft of the national finance broking legislation prepared by NSW’s Office of Fair Trading.
“Well, (the states and territories) virtually said they would hand over the regulation of credit and mortgage advice to the federal government,” he said.
“They’re going to work on some of the details of that and they have been given the month of October to come back with a paper.”
To make sure the regulation plans were kept on the rails after six years of working towards the national regulations, Mr Naylor last week found it necessary to call on the new Labor Government in an effort to ensure financial brokers would not be “roped into the Financial Services Reform Act (FSRA)”.
“We said to them there’s got to be a specific legislation for mortgage and finance brokers,” he said.
Mr Naylor said the framework used to formulate the NSW exposure draft of the national finance broking legislation was a good basis for the uniform regulation.
“The framework that has been set down should be the basis for the federal legislation,” he said. “We just got to tidy up some of the issues he have with that legislation.”