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
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).
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.
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