6 February 2020

Taking action on the Banking, Superannuation & Financial Services Royal Commission – passing legislation to protect consumers and small businesses

The Morrison Government has today passed legislation through the Parliament to enhance protections for consumers and small businesses and to strengthen the role of financial regulators.

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.
  • 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.

The Government also passed 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 more effectively enforce existing laws.

Through our actions since Commissioner Hayne’s Final Report was released, the Government has now implemented 24 commitments and has substantially progressed a further 35 which have been, or are currently being, consulted on ahead of their introduction.

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.

Significant progress has been made in implementing our commitments and we are on track to meet our accelerated implementation plan which will see more than 50 commitments, close to 90 per cent, implemented or have legislation before parliament by mid-2020.