Fundamental issues of consumer credit reform still to be resolved: FPA

While the Financial Planning Association (FPA) has welcomed the release of the draft regulations for the consumer credit protection bill, its chief executive says there are still “a number of fundamental issues to be resolved”.

These issues relate to the need to secure a separate licence to become a credit services provider, the different external dispute resolution requirements, responsible lending requirements and “the definition of credit assistance, which is very broad,” FPA chief executive Jo-Anne Bloch said.

A statement from the FPA said that between 20 and 30 per cent of its members are directly engaged in credit provision.

Bloch said financial planners have long called for better regulation of this sector. She said the national framework for credit regulation had “at long last addressed” the national “lack of consistency and uniformity” previously seen in this area.

The FPA has been involved in the consultation process for the new regulations through the Government’s industry and consumer consultative group. Bloch said the FPA had worked towards ensuring that Australian Financial Services Licensees who operate under Financial Services Regulation (FSR) are not disadvantaged by a new legislative framework.

The statement from the association said the Government had “taken on a number of the FPA’s concerns in developing the regime”.

The FPA said it is committed to working with Government on this issue to ensure Australian investors are protected, and would also consult with its members to raise awareness of the new obligations and resolve any implementation issues.

The Minister for Superannuation and Corporate Law, Nick Sherry, yesterday released the draft regulations for the National Consumer Credit Protection Bill 2009.