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As part of the proposed new National Consumer Credit Protection Bill released today, brokers will have to register with ASIC before the end of the year and all will need to be licensed by 30 June next year.
Under the new regime, anyone who "suggests" credit to consumers or provides consumers with credit will need to hold an Australian Credit Licence.
Brokers will need to apply for this registration between 1 November 2009 and 31 December 2009 and will then have six months to apply for an Australian Credit Licence, between 1 January 2010 and 30 June 2010.
And of significance for new entrants, from 1 January next year all persons who engage in credit activities for the first time on or after 1 January 2010 must apply for and receive an Australian Credit Licence before commencing business.
The legislation will create two clear groups of credit participants - credit providers such as banks and credit unions, and credit service providers, such as credit and mortgage brokers.
The legislation is aimed at creating a level playing field across the credit industry by requiring all industry participants to meet required conduct obligations and standards.
Senator Nick Sherry, minister for superannuation and corporate law said the law would see "simple, standard, national regulation of consumer credit for the first time in our country's history".
"This release sees the Rudd Government deliver on the first phase of our comprehensive plan for a national regime for consumer credit to better protect all Australians, following the historic agreement by the Council of Australian Governments in October 2008."
"The introduction of a comprehensive national licensing scheme will see consumers benefit through robust licensing that will bar unscrupulous operators from the industry; and lead to improved standards in the way lenders and brokers operate."
Comments on the draft legislation can be provided by email to [email protected] by Friday 22 May 2009.
To read the exposure draft in full click here.
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