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1/07/2010 New Lending Laws

New national licensing laws are being introduced to improve standards across the credit industry and give consumers protection against unscrupulous operators.

Under the drafted regulations, there will be a single, national regime for regulating consumer credit - including home loans, car loans, credit cards and retail lending. Anyone engaged in credit advice on home loans will have to obtain a license from the Australian Securities and Investment Commission (ASIC) or be appointed as a representative of a license holder, otherwise they will not be allowed to operate.

From 1 July 2010, credit providers will also have to comply with a new set of 'responsible lending' requirements to safeguard consumers against being offered products and services that are either unsuitable for their needs, or that they don't have the capacity to repay.

Brokers must make reasonable enquiries of consumers about their requirements and objectives in relation to the credit contract, take reasonable steps to verify the consumer's financial situation and give the consumer a copy of the assessment if requested.

There will also be new rules for the disclosure of commissions, penalties for misconduct and free external dispute resolution for consumers. The rules will cover loans on primary residences as well as the purchase or renovation of investment property.

Good news for you

The new laws are expected to give consumers the confidence that the professional advice we provide as your broker is based on the necessary level of education, experience and qualification.

The implementation of the new licensing laws means business as usual for our team. For homebuyers it means you have another good reason to trust and value our guidance and to know we have your best interests at the heart of our business.