The Victorian Government has announced its response to the wide ranging Consumer Credit Review conducted by Victoria earlier in 2006. A full copy of the response can be obtained at www.consumer.vic.gov.au
The response released on 28 September 2006 concludes that credit regulation does not need a fundamental overhaul, but important improvements do need to be made. The response is a well-balanced and sensible response to the issues raised in the Review.
Overall the Government's response focuses on making the credit market work more effectively and imposing only the minimum regulatory burden. For example, the Government decided not to impose an interest rate ceiling like NSW and ACT, but rather to strengthen the power of consumers to challenge unconscionable fees and charges, enhance financial counselling, and expand Victoria's No Interest Loan Schemes.
The main focus of the report is on small amount lending and credit card lending where it is perceived that customers are most vulnerable.
The report strongly supports maintaining national regulatory consistency wherever possible and practical. However, in some cases Victoria has decided to "go it alone" as shown below.
Key Recommendations
A more detailed summary can be found at Click Here ... The proposals relate to UCCC regulated credit only.
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Option considered |
Report's findings |
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Option 5.3: Credit fees and charges should be linked to the underlying cost of the service |
Further work needed to balance consumer protection and business interests |
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Option 5.6: Remove business purpose declarations |
Progress nationally through the MCCA (national consumer affairs group) |
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Option 6.2: Impose a positive obligation on lenders to assess the borrower's ability to repay |
Further work needed. Any change should be national |
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Option 8.1: Uniform national regulation of finance brokers |
Progress nationally |
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Option 12.3 and 12.4: Credit providers in Victoria must be members of an ADR and internal dispute resolution scheme |
Supported – Victoria may pass legislation to this effect in due course. |
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Option 14.1: Allow class actions to re-open credit contracts under s.70 and 72 of the UCCC |
Supported – Victoria may pass legislation to this effect in due course. |
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option 14.3: Empower consumer bodies to bring class actions under s.70 and 72 |
Progress nationally. |
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Sydney |
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Jon Denovan |
t (02) 9931 4894 |
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Melbourne |
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Danny Moore |
t (03) 9617 8596 |
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Peter Grotjan |
t (03) 9617 8538 |
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
