The Government has overhauled Australia's consumer credit laws, implementing a $71 million plan that will crack down on unscrupulous mortgage and payday lenders.
The Corporations Act will also be extended to include margin lending products, and disclosure statements similar to First Home Saver Accounts will also apply to these products.
The global financial crisis has incited the Australian Government to implement the measures in a bid to protect consumers from dishonest lenders, according to Prime Minister Kevin Rudd.
"These are difficult times and strong regulation is the best protection for all Australians. These new measures will protect consumers and cut red tape for business," Rudd said.
Payday lenders offer cash between people's pay days. Currently these lenders operate under different laws in each state.
Under the Government's plan, payday lenders will be brought under a national licensing regime, along with all finance brokers, advisers and credit providers.
ASIC will be given extra powers to policy the scheme.
The Uniform Consumer Credit Code will be extended to cover mortgages on investment property as well as residential homes, and will come under Federal law.
The plan will be implemented in two phases over four years. The second phase will target other predatory lending practices such as unsolicited offers that extend credit card limits.
The plan was approved at the Council of Australian Government meeting in Perth last Friday.
