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Mortgage broker and reverse mortgage regulation long overdue.

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Laurie Ferguson Shadow Minister for Consumer Affairs

Mortgage Broker and Reverse Mortgage Regulation Long Overdue

Tuesday 24th of October, 2006

Shadow Minister for Consumer Affairs Laurie Ferguson today welcomed media reports that a court ruling has opened the way for the Australian Securities and Investments Commission (ASIC) to become more involved in the regulation of credit products.

“This is especially encouraging following the completion of the review of mortgage broker regulation by the office of the Uniform Consumer Credit Code Management Committee at Consumer Affairs Victoria (CAV).”

CAV recommendations include licensing mortgage brokers in line with the standards prescribed by the Corporations Law under the Financial Services Reform Act (FSRA). This includes minimum educational standards for licensees and membership of an ASIC approved dispute resolution scheme.

“Regulation has not kept pace with the increasingly complex nature of retail financial services products. New products are coming on to the market all the time.”

“The Corporations Law is an ideal instrument for regulating the mortgage broking and reverse mortgages industries. The FSRA’s cascading disclosure regime and its prescription that retail consumers be provided with ‘clear, concise and affective’ disclosure will assist all consumers.

“ASIC is ideally suited to regulate mortgage broking and reverse mortgage loans as they have a successful track record in transitioning most retail financial services products into the FSRA regime.”

“The Corporations Law lays the foundation for improved standards of conduct and disclosure, however it is still essential that industry show leadership by prescribing self regulatory standards which enhance professionalism and protect consumers.

“John Howard’s incompetence has resulted in rising interest rates and reduced job security. This is forcing more and more Australians to look for alternative means of providing for their retirement and funding their home purchase.”

“A Beazley Labor Government will work closely with all stakeholders in order to implement measures which protect Australian consumers.”

Contact: Laurie Ferguson 0418601716