The Commonwealth Treasury has announced that the disclosure
regulations under the NCCP Act will now commence on 1 October 2011
instead of 1 August 2011.
While disclosure for lenders is reasonably straightforward (the
issue of a credit guide), disclosure by licensees and credit
representatives who provide credit assistance is more complex
requiring significant information to be set out.
This disclosure comprises three documents:
credit proposal disclosure.
The requirements specified in the NCCP Act itself needed some
further explanation, and that explanation is to be contained in
amendments to the NCCP Regulations. These additional
regulations have not yet been released.
These disclosure regulations were due to start on 1 August 2011
but the start date has now been postponed until 1 October 2011.
The new regulations will be available soon. Licensees
and credit representatives who provide credit assistance will then
be able to commence drafting their three disclosure documents.
In the meantime, regulation 28N provides an exemption to the
disclosure requirements so that credit assistants do not need to
provide the disclosure documents so long as before providing credit
disclose details of their EDR scheme;
enter a written contract with the consumer specifying any fees
payable by the consumer to the credit assistant
An easy way to comply is to use the MFAA's Finance Broking
Contract which not only discloses the required information, but
also provides other valuable information to help consumers and
Until the new regulations commence, brokers should not use
documents titled 'credit guide', 'quote' or
'credit proposal document' as those titles will trigger
compliance with the existing law which is very onerous and almost
impossible to comply with in most cases.
What licensees and credit representatives who provide credit
assistance need to do
Until 30 September 2011, continue disclosing your EDR details
and (if applicable) entering fee contracts before you provide
credit assistance. This is most conveniently achieved by
using the MFAA's finance broking contract.
As soon as the regulations are released, watch out for the
MFAA's suggested form of credit guide, quote, and proposal
In the years following the global financial crisis of 2008 many Australian investors lost their life savings as financial products failed and the Australian Stock Exchange shed over 3,000 points.
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