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Industry regulation has inched one step closer following the release of the draft National Consumer Credit Protection Bill 2009 by Senator Nick Sherry yesterday.
Under the proposed legislation both lenders and brokers will need to hold an Australian Credit License. In addition, extending credit to a consumer that is unsuitable based on their needs and financial capacity will become an offence.
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“The introduction of a comprehensive national licensing scheme will see consumers benefit through robust licensing that will bar unscrupulous operators from the industry and lead to improved standards in the way lenders and broker operate,” Mr Sherry said.
The licensing regime should commence on January 1, 2010, Mr Sherry said, after which license holders will face tough penalties including fines, a loss of license or even jail time, for failing to comply.
