Australian Bankers’ Association submission on the
Financial Services and Credit Reform Green Paper

Sydney, 3 July, 2008: The Australian Bankers’ Association (ABA) this week filed a submission to Treasury on the Financial Services and Credit Reform Green Paper (the Green Paper).

In its submission, the ABA strongly supports the Australian Government taking complete regulatory responsibility for consumer credit, consumer credit providers and intermediaries providing advice on credit products, as outlined in option 2 of Chapter 1 ‘Mortgages, Mortgage Broking and Non-deposit Taking Institutions’ in the Green Paper.

The ABA believes the Australian Government should take responsibility for all remaining matters under consideration by the Ministerial Council on Consumer Affairs in relation to consumer credit and finance broking, and for continuing consultation with stakeholders.

The ABA calls for the Consumer Credit Code (UCCC) to be re-enacted as a stand-alone Commonwealth statute and that it not be incorporated with Chapter 7 of the Corporations Act (FSR).

The ABA notes that the Green Paper presents high-level policy and framework options with a tight schedule for review.  It is therefore essential that an appropriate working party, with representatives from consumer credit providers, is established early to assist with the development of the detailed regulatory proposals.
      
The ABA advocates that the Australian Securities and Investments Commission (ASIC) should be the sole responsible regulator.
David Bell, Chief Executive of the ABA, said: “Without the Australian Government having complete regulatory coverage of these consumer credit related matters, the deficiencies under the current regulatory arrangements will not be overcome.

“This would mean consumers and the consumer credit industry would not reap the benefits of a streamlined single national regulatory regime.

“Such deficiencies will be the inevitable result if there is split responsibility between the States and Territories and the Australian Government based on credit product type.”

The ABA makes limited comments on margin lending and debentures in the submission, leaving other industry bodies to lead the responses on these aspects.

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ENDS