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Date Published : Friday, June 06, 2008
The Australian federal government has unveiled proposed reforms that would ban predatory lending by mortgage brokers in the country.
Nick Sherry, minister for corporate law, launched a new green paper on the plans this week that would introduce wider regulation of the mortgage industry.
According to the Treasury paper, "the conduct of and the advice given by some mortgage brokers has been unsatisfactory" and uniform regulation is needed to address problems with malpractice in the sector.
The proposals are intended to draw together fragmented state regulation systems and provide better safeguards for consumers, the Sydney Morning Herald reports. Currently, the majority of credit and banking regulation has been dealt with by individual states rather than central government.
"This is about better protection of the mums and dads who take out a mortgage and deserve to know that the brokers selling it to them are reputable and upfront with their fees and charges," senator Sherry stated. "The current regulation in these areas is either duplicated, patchy, confusing, very hard to change or even non-existent."
The proposed review of the Australian banking and credit industry has been broadly welcomed by both industry associations and consumers.
However, some experts have expressed concern that it could complicate matters further or fail to provide tough enough legislation to adequately protect consumers from irresponsible lenders.
Discussing the proposed reforms, Senator Sherry told network ABC that "it's necessary to have single national regulation, single simpler standard regulation", adding that "it will improve consumer protection" and make the system more efficient and cost effective for businesses.
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