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ISCOVER
Steven Cross
Just over one year after the National Consumer Credit Protection Act came into play, the government is already looking to make changes to the legislation.
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Under the amendments, the government would like to restrict brokers from using the terms “independent” or “impartial”.
“Restrictions on the use of ‘independent’, ‘impartial’, ‘unbiased’, ‘financial counsellor’, and ‘financial counselling’ by brokers, subject to exceptions when truly independent,” the proposed amendment read.
This is just one of 14 proposed amendments – most of which are set to come into effect in March 2013.
MFAA’s chief executive Phil Naylor said while the amendments were largely expected, he was upset that the industry body had only been given a short time to review the proposed changes – with submissions due next Monday.
"A couple of key ones [amendments] stand out as being inconsistent with what we think the NCCP is all about," he said.
"We'll be making submissions raising these inconsistencies, we just think it creates an urgency to do things now when it's time to let the dust settle.
"We made the point in our submission on the NCCP review to the Productivity Commission that there has got to be a line in the sand at some time where the Government says, ‘Okay, we've reviewed this industry, let's let the dust settle and let brokers and everyone else engaged with the industry digest it all before we make any further changes.’”
Some proposals in the Bill may spark some backlash from the broker channel.
Removal of the $500,000 cap on eligibility for hardship claims in EDR schemes and a move to increase the financial liability of brokers engaging in 'unfair' and 'dishonest' conduct are some of the points that may concern brokers.
"Our view is that EDR schemes were initially established to assist and protect mums and dads, not to protect large operators or people with massive amounts of credit," he said.
"By removing that cap, virtually anyone can make a hardship claim and we don't think that's the purpose of the exercise."
"Furthermore, while no-one wants brokers to operate unfairly or dishonestly, the definition of those terms leaves a lot to be desired and would create more uncertainty in the industry as to what is unfair and dishonest."
However, Mr Naylor does not foresee any huge changes on the horizon for brokers as a result of this new legislation.
"We can assure members that we are working hard to ensure, whatever the final regulations are, they will be practical and common sense for brokers to comply with," he added.
