Southport MP. MP for Southport, Gold Coast. Peter Lawlor: peterlawlor.com.au

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Chirn Park
Queensland 4215
Tel: 5532 5068
Fax: 5532 0394
email: southport@parliament.qld.gov.au


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Transfer of consumer credit regulation to the Commonwealth
Posted by editor (editor) on Jul 22 2010
2010 >>

Asked on 19 May 2010

MR RYAN ASKED THE MINISTER FOR TOURISM AND FAIR TRADING (MR LAWLOR) —

QUESTION:

Will the Minister outline what it will mean for my constituents with the responsibility for the regulation of consumer credit transferring to the Commonwealth this year?

ANSWER:

The national credit laws will provide for a consistent regime that extinguishes the gaps and conflicts that may exist in the current regime where each state and territory separately regulates consumer credit. These reforms will not only benefit business and consumers, but promote higher lending industry standards and greater market integrity.

The transfer of credit is being implemented in two phases. Phase 1 commences on 1 July 2010.

Phase 1 transfers the existing state and territory legislation known as the Uniform Consumer Credit Code to become incorporated into the Commonwealth’s National Consumer Credit Protection Act 2009. However, the scope of the present Uniform Consumer Credit Code will be extended to include the regulation of credit provided to purchase, renovate, improve or refinance a residential investment property.

Other key elements of phase 1 will include: a licensing regime for all providers of consumer credit and credit-related services, and industry-wide responsible lending conduct requirements on licensees; mandatory membership to an external dispute resolution body by all licensees; and specific conduct requirements for finance brokers.

The Australian Securities and Investments Commission (ASIC) will have powers to police the new regime. It will maintain existing levels of service to the public including enforcement of the legislation.

In phase 2 of the transition, the Commonwealth will consider additional credit matters such as extending the credit laws to small business and an examination of state approaches to interest rate caps. The Bligh Government will continue to strongly urge the Rudd Government to include an interest rate cap in the national law. While the Commonwealth considers its position, the Bligh Government will continue to enforce its interest rate cap, which is set at 48%.

Last changed: Jul 22 2010 at 12:06 PM

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Transfer of consumer credit regulation to the Commonwealth