The Ministerial Council on Consumer Affairs ("MCCA") has just met and released a communiqué with proposals for far-reaching consumer policy reform it will recommend to the Council of Australian Governments for its October meeting.
One of the main recommendations is for the introduction of a new national consumer law, which operates in all Australian jurisdictions and which remains consistent, to be based on the current consumer protection provisions of the Trade Practices Act 1974 plus appropriate amendments reflecting best practice in state and territory legislation.
Relevantly for consumer credit, the communiqué states that constitutional issues may mean that the financial services sector may need to retain a distinct legislative framework. Significantly, it notes the Federal Government's position that there should be an ongoing commitment by the Federal Government to consistency between the proposed National Consumer Law's provisions and consumer provisions in credit and financial services laws to the extent practical. This seems a tacit acknowledgement that credit regulation has now become a Commonwealth issue in light of agreement by the States and territories to transfer consumer credit regulation to the Federal Government - which is specifically referred to in the communiqué. We understand that the debate as to whether credit regulation is to fall within the FSR regime or be subject to a separate regulatory regime is still continuing.
The other major recommendation is that laws dealing with unfair contract terms should form part of the national law - but limited to standard form contracts. This approach is largely based on the Productivity Commission's recommendations in adopting key features of the English model. MCCA is also proposing that an additional and separate right be given to the Federal Minister to prescribe terms by regulation. The communiqué does not say whether credit would be covered by this law. The unfair terms legislation currently in force in Victoria excludes credit but the Victorian Government has announced that it proposes to end this exclusion.
Finally the communiqué states that, moving forward, at a Commonwealth level, ASIC should be responsible for the enforcement of financial services regulation (which presumably includes consumer credit).
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