The Federal Government will release a consultation paper to the mortgage and broking industry as part of its proposal for a new national credit regulation.
“My first step toward developing national credit regulation is the imminent release of the Government’s latest Green Paper,” Minister for Superannuation and Corporate Law Nick Sherry said.
“This paper will be released for consultation and I am asking for feedback on several high-level, but fundamental, questions about the proposed regime.”
Sherry unveiled the Government’s proposal for a new national regulation of Australia’s credit industry need for Australia’s credit industry at last week’s Mortgage and Finance Association of Australia (MFAA) national conference.
“The regulation of credit is mainly undertaken by the states and territories through the Uniform Consumer Credit Code. There is now widespread acknowledgement that the regulation of credit needs to be reformed. And that it needs to occur at a national level,” he said.
Despite support for reform, proposed changes to the credit code have been delayed due to “inter-jurisdictional hoops”, Sherry said.
“Some jurisdictions have introduced broker-specific legislation with Western Australia introducing a licensing regime. But these jurisdictional differences have increased compliance costs and introduced gaps in regulation,” he added.
At present there are eight sets of regulation for the industry across the country making the framework highly inefficient.
“This system also imposes an unnecessary regulatory burden on the providers of financial services, including mortgage brokers,” Sherry said.
“One, single, simpler national regime for regulating mortgages and brokers is the only logical solution.”
The Government intends to consult with the MFAA as to which direction a national regulation will take.
