Minister for Superannuation and Corporate Law
3 December 2007 - 8 June 2009
COAG Agree to Transfer Responsibility
for All Consumer Credit to the Commonwealth
Senator the Hon Nick Sherry, Minister for Superannuation and Corporate Law, has announced that the Commonwealth Government reached agreement with the States and Territories at today's Council of Australian Governments (COAG) meeting in Sydney, to assume responsibility for regulation of all consumer credit.
Consumer credit includes personal loans, credit cards, pay day lending and micro loans.
"Current consumer credit regulation is duplicated, patchy, very hard to change or even non-existent and does very little to protect Australians, whilst imposing unnecessary red tape on business."
"It's currently a lose/lose situation, but today we've moved to a win/win", said Minister Sherry.
"We will introduce a regulatory structure for the 21st century, one which includes simple, standard national regulation, replacing regulation in six states and two territories."
COAG has also formally agreed today that the Australian Government will assume responsibility for regulating mortgages, mortgage brokers, trustee companies, non-bank lenders and margin loans.
In March, COAG requested that the case for reform of consumer credit be further examined. To this end, the Government released a Green Paper on Financial Services and Credit Reform in early June. Targeted consultations with the States and Territories and the business and consumer sectors have established the case for quick action to transfer regulation of all consumer credit to the national level.
"National consumer credit regulation will close loopholes that have existed in various State and Territory jurisdictions and have allowed unscrupulous credit providers at the fringe end of the market to take advantage of people in desperate circumstances."
The agreement was formalised at today's COAG meeting in Sydney. During the coming months, the Commonwealth Government, in consultation with the States and Territories, will develop a plan to present to COAG before the end of 2008 on how this major agreement will be implemented.
The States and Territories have done a worthy job up to now. The reality is that financial products have developed to a point where we now need national consumer protections and clear rules for businesses," Minister Sherry said.
3 July 2008