Legislative Assembly for the ACT: 2008 Week 09 Hansard (Thursday, 21 August 2008) . . Page.. 3557 ..
Answers to questions
(Question No 2003)
Dr Foskey asked the Attorney-General, upon notice, on 2 April 2008:
• In relation to the home loan market debate held in the Assembly on 22 August 2007, what progress has the Ministerial Council on Consumer Affairs made on the issue of no-doc and low-doc home loans;
• What progress has the ACT Government made on the issue of no-doc and low doc home loans;
• When does the ACT Government intend to present legislation regarding this type of lending.
Mr Corbell: The answer to the member’s question is as follows:
• Low-doc loans to consumers must comply with the Consumer Credit Code and the ACT Consumer Credit (Administration) Act 1996. The Code does not mandate how the lender should assess risk, although if a lender ignores capacity to repay, the loan may be challenged and can ultimately be rewritten.
The Ministerial Council on Consumer Affairs (MCCA) is developing national finance broker legislation which will require brokers to be satisfied that the consumer can afford the loan and a requirement for a broker to justify recommendations made.
The policy development process to date has included a major national roundtable; a detailed consumer-advocate research paper; two comprehensive regulatory impact statements; two rounds of national consultation with a range of stakeholders, including broker peak bodies, credit provider peak bodies, consumer advocates, consumer credit specialists and related regulators; extensive negotiations with the Office of Best Practice Regulation (Clth); and the development by NSW (on behalf of MCCA) of a draft template exposure bill that has been circulated to key stakeholders and was the subject of a further national roundtable at the end of June 2007. The results of this roundtable were released in a final exposure bill at the end of 2007. Submissions have been received and NSW is now working on revising the bill based on the comments received.
• The ACT is progressing these issues through MCCA and the Committee under MCCA that is responsible for developing the national bill. This is due to the desirability of ensuring legislative consistency with other jurisdictions on matters of consumer credit.
• COAG has recently agreed that the Commonwealth will take over responsibility for the regulation of mortgage broking, margin lending and non deposit lending institutions as well as remaining areas of consumer credit. COAG has indicated that “national regulation through the Commonwealth of consumer credit will provide for a consistent regime that extinguishes the gaps and conflicts that may exist in the current regime. The new regime is anticipated to introduce licensing, conduct, advice and disclosure requirements that meet the needs of both consumers and businesses alike. A seamless national regime will assist in ensuring that consumers are better protected in their dealings with credit products and credit providers, including brokers and advisers.”