Senator Nick Sherry, Minister for Superannuation and Corporate Law, has today released the draft National Consumer Credit Protection Bill 2009 following a detailed six-month industry consultation. The Bill slashes red tape for business by putting in place one, single, standard national regime to support a truly national consumer credit market.
The new law will replace inconsistent State and Territory laws and will significantly reduce the amount of credit legislation across Australia from up to 2,500 pages over eight jurisdictions down to one comprehensive regime.
The draft laws follow a six-month intensive industry and consumer group consultation process involving all key banking, finance and planning industry groups.
“This package of reforms will significantly benefit industry by reducing duplication and cross-jurisdictional red tape across the states and territories.”
“Over 2,500 pages of law has been cut down and streamlined to one national regime – this will greatly reinforce a truly national consumer credit market, whilst reducing the compliance burden and boosting consumer protection.”
“It replaces eight sets of regulation, including a range of consumer credit-related laws that are inconsistent between different States and Territories, on issues such as the regulation of lenders and brokers.”
“I am very thankful to industry for the very constructive role they’ve played in developing these draft laws – their practical experience has added considerably to the outcomes,” said Minister Sherry.
The regime, which establishes a comprehensive national Australian Credit License regime and imposes tough responsible lending obligations on both lenders and brokers, will be overseen by one well-resourced national regulator, the Australian Securities and Investments Commission (ASIC).
“ASIC will be provided with appropriate powers to respond swiftly, effectively and uniformly to breaches of the law. These are sweeping reforms that will not only benefit consumers, but promote higher lending industry standards and greater market integrity.”
“Businesses will no longer have to contend with receiving conflicting advice from different State-level regulators, or deal with a web of cross-jurisdictional regulations,” Minister Sherry said.
To minimise industry disruption and ease the compliance burdens of the new regulatory regime, the industry will transition to the new credit regime in two clear stages – starting with registration, followed by licensing, when extra requirements must be met. Certain credit providers, such as regulated banks and credit unions, and some credit service providers will be offered streamlined licensing to further assist in keeping costs low as the new regime is rolled-out.
“This process has been carefully designed to be as straightforward as possible for businesses, while ensuring that registration remains a rigorous and vital part of the licensing process,” Minister Sherry said.
Businesses will be able to register with ASIC online from 1 November, 2009, and continue operating without business disruption at the same time that they move to meet core requirements of full licensing.
To further assist businesses to gear up for the changeover to the new regime, ASIC will form an industry working group and will actively consult with business concerning the development of detailed industry and licensing guidance material.
Further details of the national consumer credit package, including the full text of the Bills and details about how to make a submission on the Exposure Draft legislation can be found at www.treasury.gov.au/consumercredit.