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AUSTRALIA – Existence of irresponsible lending has led to the Federal Government being set to take control of all consumer credit products.
The Age - Melbourne,Victoria,Australia, Annabel Stafford, July 4, 2008


DODGY pay-day lenders and unscrupulous companies that hand credit cards to teenagers may soon face tougher regulation after state and territory leaders agreed to centralise the responsibility for regulating consumer credit in Canberra.

The Council of Australian Governments had previously agreed to make the Commonwealth responsible for regulating mortgage lenders, trustee companies and margin loans, but yesterday it added consumer credit to the list.

The move comes amid fears that consumers are falling prey to lenders that do little to check their suitability for a credit card or personal loan, leaving them financially exposed.

Consumer credit products include credit cards, personal loans for things like cars, micro-credit and pay-day lending, in which cash-strapped consumers seek a loan to help them survive from one pay packet to the next.

A spokeswoman for Senator Nick Sherry, the federal Minister for Superannuation and Corporate Law, said consumer advocates and the industry had pushed Canberra to take over regulation of consumer credit, so that dodgy providers could not take advantage of consumers by exploiting different regulations in different states.



The Australian - Sydney, Australia, Nicola Berkovic | July 04, 2008

THE federal Government is set to take control of all consumer credit products, including mortgages, credit cards and pay-day loans, as part of a landmark agreement reached yesterday for uniform national regulation in 14 key areas between Kevin Rudd and state and territory leaders.

Business groups welcomed government moves to cut red tape and iron out state differences in areas including occupational health and safety, business name registration and trades licensing.

Business Council of Australia president Greig Gailey said progress had been made towards a seamless economy for business regulation in areas such as payroll tax and product safety laws.

"Harmonisation of business regulation will reduce unnecessary costs and burdens for businesses operating across states," Mr Gailey said. Australian Industry Group chief executive Heather Ridout welcomed moves to include preventative health and national reform of the vocational education and training sector as priority areas for future Council of Australian Governments reform.

"Reform in these areas in particular has the potential to add substantially to productivity and workforce participation and to assist in developing a more highly skilled workforce," she said.

The agreement to a review of Australia's anti-dumping system by the Productivity Commission was extremely important at a time when Australian companies were under immense competitive pressure in the domestic market, Ms Ridout said.

"AI Group supports vigorous and fair competition. However, we believe that a considerable volume of products is being dumped unfairly on the Australian market, compounding the pressures on industry," she said.

Corporate Governance Minister Nick Sherry yesterday announced the commonwealth's intention to replace the current "duplicated" and "patchy" consumer credit laws with a uniform system. Details of the new laws would be available in six months.

The Australian Banking Association, which has for some time lobbied the federal Government to take control of all credit products, said the changes would make the banking sector more efficient.

"We would call for the current uniform consumer credit code, which is currently administered by the states, to be re-enacted as a standalone commonwealth statute," chief executive David Bell said. "That will be the simplest and quickest way to give effect to what they've agreed today."

ID: 41464
Author(s): SCR
Publication date: 03/07/08

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Link to Article Business welcomes government move - The Australian

Created: 04/07/08. Last changed: 04/07/08.
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