The Mortgage and Finance Association of Australia (MFAA) today called on the Government to keep the new licensing procedures proposed for the industry simple and easy to avoid driving smaller operators out of mortgage broking.

The calls came as part of the Association’s submission on the National Consumer Credit Protection Bill draft.

“The overall thrust of the exposure draft is sound, and the MFAA supports stronger legislation to stamp out predatory practices and better protect consumers,” said Phil Naylor, CEO of the MFAA.

“However, the vast majority of the mortgage brokers practicing today as small operators and we need the Government to ensure that the licensing requirements are not cumbersome or onerous and do not prevent these small operators from staying in business.

“The Bill and explanatory notes recognise that providing credit is a different process to providing financial services and investment advice. The Government has shown this by avoiding the temptation to bundle brokers and providers of credit into the existing AFSL regime and setting up separate laws,” said Mr Naylor.

“It is important now, that the new consumer credit laws do not fall into the trap of being as complex as the existing AFSL processes.

“The vast majority of brokers are small (mainly one person) businesses, so the licensing process must reflect this and be simple to comply with, and must not include artificial hurdles which do nothing to protect consumers,” said Mr Naylor.

“The complexity of the AFSL process militates against the licensing of small operators, a situation we need to avoid in order to promote competition and consumer choice.”