1 July 2010 will see the introduction of the Federal Government’s new consumer protection laws. So what does this mean to you?
The “National Consumer Credit Protection” legislation will provide improved consumer protection and see the introduction of new rules governing how providers of credit must conduct their business. Banks, finance companies, mortgage managers, mortgage brokers and any provider of consumer credit will be regulated under these new laws.
From 1 July 2010, all providers of consumer credit must be registered with the Australian Securities and Investments Commission (ASIC) and be authorised to deal in the provision of consumer loans. Anyone who is not registered, or is not an Authorised Credit Representative of a registered company will not be able to deal in the provision of consumer loans or even give advice about consumer credit until they apply for (and are granted) an Australian Credit License.
So what does this mean to you?
Borrowers can expect to be better informed when seeking a home loan or personal investment loan. Whether discussing your finance needs with a mortgage lender or broker, borrowers will be supplied with:
- Greater detail about the loans available to them
- A detailed written “guide” that sets out the commissions being paid to the lender, or that the lender is paying to any third party
- Details of the lender or broker’s “Preliminary Assessment” which must evidence whether the borrower’s application will both comply with the lender’s policies and be a suitable loan within the borrower’s capacity to repay.
Under these new laws credit providers will be required to conduct “reasonable inquiries” to ensure that borrowers are not given loans that are unsuitable for both their stated purpose and ability to repay without undue hardship.
Homeloans Senior Manager of Risk and Compliance, Stephen Fergusson, says these new laws are a great leap forward in consumer protection and that Homeloans is well positioned as Australia’s largest non-bank registered credit provider.
“Our professionally accredited loans consultants and accredited panel of mortgage brokers are all compliant with the new laws and eager to discuss how they help you achieve your financial goals,” Stephen says.
If you want to know more about the new credit laws or simply discuss a loan, contact us on 13 38 39 and speak to one of our accredited loans consultants.