Consumers and small businesses will be further protected under legislation introduced into the Parliament today by the Morrison Government.
The Financial Sector Reform (Hayne Royal Commission Response - Protecting Consumers (2019 Measures)) Bill 2019 addresses four recommendations from the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry including:
- Recommendations 1.2 and 1.3 - requiring mortgage brokers to act in the best interests of consumers when providing consumer credit assistance; reforming mortgage broker remuneration by requiring the value of upfront commissions to be linked to the amount drawn down by borrowers instead of the loan amount; banning campaign and volume-based commissions and payments; and capping soft dollar benefits. These measures will apply from 1 July 2020.
- Recommendation 4.2 - ensuring that the consumer protection provisions of the financial services law apply to funeral expenses policies.
- Recommendation 4.7 - banning unfair contract terms in standard insurance contracts. This will apply from 5 April 2021 which is consistent with the commencement of the design and distribution obligations.
The Government will also introduce the Financial Sector Reform (Hayne Royal Commission Response - Stronger Regulators (2019 Measures)) Bill 2019. The Bill implements a further four additional commitments the Government announced at the time of responding to the Royal Commission and will ensure that ASIC can effectively enforce existing laws.
The Government is taking action on all 76 recommendations contained in the Final Report of the Royal Commission and, in a number of important areas, is going further. Restoring trust in Australia's financial system is part of our plan for a stronger economy.