The Implementation Plan

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On 2 October 2008  the Government announced its two-phase implementation plan for national regulation of consumer credit.

The draft legislation  released on 27 April 2009 delivers Phase One of the Government's announcement of 2 October 2008.

Key elements of Phase One:

  • Enacting the existing State legislation, the Uniform Consumer Credit Code (UCCC), into Commonwealth legislation.
  • Establishing a national licensing regime to require providers of consumer credit and credit-related brokering services and advice to obtain a licence from ASIC.
  • Extending the powers of the Australian Securities and Investment Commission (ASIC) to be the sole regulator of the new national credit framework with enhanced enforcement powers.
  • Requiring licensees to observe a number of general conduct requirements including responsible lending practices.
  • Requiring mandatory membership of an external dispute resolution (EDR) body by all providers of consumer credit and credit-related brokering services and advice.
  • Extending the scope of credit products covered by the UCCC to regulate the provision of consumer mortgages over residential investment properties.
  • Extending the operation of the Corporations Act to regulate margin lending.
  • Regulation of trustee corporations.
  • Phase One legislation was in place for commencement on 1 July 2010.

Key elements of Phase Two:

Phase Two of the national consumer credit regime will be delivered in two tranches.  Legislation to give effect to regulation for Part One of Phase Two will be in place by mid-2011, and for Part Two by mid-2012.

For Part One of Phase Two of the Government will consider the need for:

  • enhancements to the regulation of and tailored disclosure for reverse mortgages;
  • consideration of the treatment of consumer leases including the disclosure and linked credit requirements;
  • regulation of other forms of credit used for personal use including peer to peer lending;
  • enhancements to the regulation of credit cards;
  • extending unjust conduct provisions to credit service providers; and
  • further enhancements to the Code.

For Part Two of Phase Two the Government will consider projects requiring more in depth industry consultation, including:

  • the need for regulation of the provision of credit to small business;
  • the need for regulation of credit for investment loans other than margin loans and residential property investments;
  • examination of mechanisms, including State approaches to interest rate caps, to address predatory or fringe lending;
  • an examination of the need for any enhancements to responsible lending conduct obligations;
  • a review of the regulation of credit advertising; and
  • reform of mandatory comparison rates.

 

Miscellaneous