Consumer Credit Protection Bill 2009 - All you need to know
Well, it’s finally here and I’m sure there are a lot of people who are very interested in what the new Australian Credit License (ACL) system is all about.
The Rudd Government has introduced the first phase of our comprehensive plan for a national regime for consumer credit
So, without trying to introduce this post too much, I’m pretty sure you’ll all get the idea as you read further and get up to date with the news on this new bill.
News Update 1:
Public exposure of national consumer credit protection bill 2009
Quote from the press release:
Senator Nick Sherry, Minister for Superannuation and Corporate Law, today released the Rudd Government’s draft national credit laws for public comment.
“I am pleased to announce the release for public exposure of the National Consumer Credit Protection Bill 2009 and the proposed Regulations and Explanatory Material.”
“This law will see simple, standard, national regulation of consumer credit for the first time in our country’s history.”
“This release sees the Rudd Government deliver on the first phase of our comprehensive plan for a national regime for consumer credit to better protect all Australians, following the historic agreement by the Council of Australian Governments in October 2008.”
News Update 2:
New national responsible lending laws
Quote from the press release:
Senator Nick Sherry, Minister for Superannuation and Corporate Law, has today released the draft National Consumer Credit Protection Bill 2009 which will put in place new national responsible lending laws for all consumer credit in Australia.
It will be a condition of holding a new Australian Credit License (ACL) that lending must be done responsibly. All forms of consumer credit will be captured and it will become an offence to supply credit irresponsibly.
The laws, which are intended to operate from 1 November, 2009, will entail two elements for assessing whether credit is being extended responsibly. These are: assessing the unsuitability of a credit product for an individual and assessing a persons’ capacity to repay the proposed credit debt.
“For the first time, Australia will have laws that prohibit irresponsible lending to consumers by all types of credit providers. This is a major enhancement to our consumer protection regime and is a decade overdue.”
“Some families who can in fact maintain a reasonably sized mortgage are often saddled-up with more debt than they need and often more than they can repay. This can lead to losing everything and it just won’t be tolerated anymore.”
News Update 3:
National credit market slashes red-tape for business
Quote from the press release:
Senator Nick Sherry, Minister for Superannuation and Corporate Law, has today released the draft National Consumer Credit Protection Bill 2009 following a detailed six-month industry consultation. The Bill slashes red tape for business by putting in place one, single, standard national regime to support a truly national consumer credit market.
The new law will replace inconsistent State and Territory laws and will significantly reduce the amount of credit legislation across Australia from up to 2,500 pages over eight jurisdictions down to one comprehensive regime.
The draft laws follow a six-month intensive industry and consumer group consultation process involving all key banking, finance and planning industry groups.
“This package of reforms will significantly benefit industry by reducing duplication and cross-jurisdictional red tape across the states and territories.”
“Over 2,500 pages of law has been cut down and streamlined to one national regime – this will greatly reinforce a truly national consumer credit market, whilst reducing the compliance burden and boosting consumer protection.”
News Update 4:
Australia to get world-leading credit licensing regime
Quote from the press release:
Senator Nick Sherry, Minister for Superannuation and Corporate Law, has today released the draft National Consumer Credit Protection Bill 2009, which will deliver on the Rudd Government’s commitment to modernise Australia’s financial services sector by establishing a world-leading consumer protection-focused national credit licensing regime.
“This is a modern national licensing regime fit for the 21st century. Compared to other key OECD economies, these laws are at a world-leading standard.”
“This Bill creates the Australian Credit License (ACL). After a registration phase, coverage of the ACL regime will commence on 1 January, 2010, will be Australia-wide and will include all parts of the credit industry.”
“ACL holders will all be required to meet minimum entry standards before they can offer products and services to consumers,” said Minister Sherry.
Loading ...
Troy June 30, 2009
A real lot to digest here but isn’t it great.
The finance broking and lending industry in general has seen deteriorating standards over a number of years with too many people who simply shouldn’t be there being allowed to operate. I include in this brokers who don’t know the difference between interest only and principal and interest loans (yes I was at a lender training session when this question was asked by a broker who allegedly knew what he was doing and had been operating for more than two years), brokers and bank lending officers who don’t properly know how to structure loans in the clients’ best interest, lenders who approve loans for clients under criteria that clearly puts borrowers under financial strain ( can a couple really live on $1800 per month to cover food, utilities, medical expenses, transport and if their lucky entertainment) and bank lending officers who can provide on the spot approvals to clients that have been declined through the broking system due to service ability (how many times have I read or heard about this scenario in the past six months).
Anyone who claims the new requirements are too onerous needs to really look at whether they want to be in the industry at all. The new legislation is very good and long overdue.
I note that the banking association are saying the new guidelines will make it too onerous and will slow down the approval process. Well that is not a bad thing either as maybe they will then look at improving their staff training to ensure those people entrusted to talk to clients about loan applications and the staff employed to review the applications will be more knowledgeable and improvement in standards will result.
New legislation, bring it on !!