Regulation of mortgage brokers, lending practices and consumer credit code amendments

In response to the recent call by the Treasurer for the States to accelerate work on the licensing, conduct and disclosure of mortgage brokers and the report of the House of Representatives Economics, Finance and Public Administration Committee on
Home loan lending – Inquiry into home loan lending practices and the processes used to deal with people in financial difficulty the States have provided an update on consumer credit code review progress.

The Ministerial Council on Consumer Affairs has now announced that:

  • It is anticipated that a draft exposure Bill for the mational regulation of finance brokers will be released by December 2007.
  • In response to concerns raised about reverse mortgages, the Ministerial Council on Consumer Affairs has agreed that there should be a prescribed Information Statement for reverse mortgages and a statutory protection against negative equity.
  • The Ministerial Council on Consumer Affairs has agreed to investigate the introduction of mandatory participation in external dispute resolution by all providers of consumer credit.  The consultation regulatory impact statement is being prepared.
  • Consultation on the bill facilities regulation amendment has now closed. It is anticipated that the regulation could be made as early as the end of October 2007.
  • As part of an ongoing review of the fringe credit industry, the Ministerial Council on Consumer Affairs has invited comments on the exposure drafts of the Consumer Credit Code Amendment Bill 2007 and Consumer Credit Amendment Regulation 2007.  The deadline for submissions has been extended until 5 October 2007.
  • In respect of reform to pre-contractual disclosure, the Standing Committee of Officials of Consumer Affairs has agreed to UCCCMC commissioning research, by an independent consultant, into
    pre-contractual disclosure with the goal of developing a disclosure
    model which addresses the needs of consumers. Negotiations are
    currently underway with the preferred tenderer.
  • In respect of instalment contracts, a Bill has been finalised and submitted to the Ministerial Council on
    Consumer Affairs for approval to be made by the Queensland Parliament.
    Provisions affecting solicitor lending have been removed altogether
    pending further consideration of the underlying issues.
  • A consultation regulatory impact statement on responsible lending through credit cards is being prepared and should be released before the end of the year.
  • An independent review on mandatory comparison rates is still being considered.
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