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You should do three things to decide whether or not you need an ACL:
- Read our blog post describing the proposed legislation; and
- Download and examine our 1-page diagram outlining the draft legislation (see below); and
- Ask our associated legal practice for legal advice or assistance to take the next step.
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We can help you strategise and apply for an ACL. Registration with ASIC will happen at the end of 2009, and ACLs will be granted in the first half of 2010. Contact us now to get in early.
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New Consumer Credit laws announced
It’s official – almost. Australia will soon have new laws governing consumer credit. For the first time mortgage brokers and other credit providers will need to comply with a credit licensing regime that will be very similar to the current financial services licensing regime. Investment loans will be covered by the proposed credit laws.
On 27 April, the Federal Government released an Exposure Draft of the National Consumer Credit Protection Bill 2009 for public comment. The new laws are expected to be introduced at the end of June 2009. In the past, consumer credit activity has been governed by the Uniform Credit Code. This was not a federal regime and the scope of the Code was lacking in many areas. For example, market changes meant that credit providers were now extensively using third parties to "sell" their credit products (e.g. mortgage brokers) however the activities of these third parties were not covered by the Code. The new Bill seeks to address these shortcomings and expand the reach of consumer credit legislation. To provide any of the credit services covered by the proposed laws, you will need to have a new Australian Credit Licence, or be authorised by a licensee. The system will be very similar to the current Financial Services Licensing regime.
How will the new laws affect you? See our summary of the Bill below, or download an image of it here (it's bigger in the PDF).
Want to know more about how the Consumer Credit Reforms will affect your business?
You can see the draft consumer credit legislation.
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