The Commonwealth Government reached agreement with the States and Territories at the Council of Australian Governments (COAG) meeting in Sydney on 3 July 2008, to assume responsibility for regulation of all consumer credit. (see here and here for details)
At its meeting on 2 October 2008 COAG decided how this major agreement will be implemented.(summary here).
The decision will result in:
- the Consumer Credit Code being incorporated in the Corporations Act to be supervised by ASIC;
- credit providers and finance brokers will be licensed by ASIC;
- a national consumer protection law supervised by the ACCC.
Legislation for the transfer of responsibility for the Consumer Credit Code will be introduced by mid 2009 to take effect in 2010.
Phase two will deal with the regulation of remaining areas of consumer credit, including pay-day lending (for example, pawnbrokers), credit cards, store credit, investment and small business lending, and personal loans,
Consistent with the Government’s preference for simpler disclosure documents there may be changes to loan contract requirements. These changes may not be synchronised with the proposed Privacy Act changes on credit reporting.
It is yet to be seen what impact the changes will have on Credit Code breaches including penalties and reporting and whether there will be a national tribunal.