Govt lauds reverse mortgage industry body

by Darren Moffatt on October 6, 2011

  • Sumo

The assistant treasurer, Bill Shorten, recently tabled new ‘second phase’ National Consumer Credit Protection (NCCP) legislation to parliament. For reverse mortgages, the Bill includes:

Mr Shorten praised the conduct of the reverse mortgage industry body:

“Development of the reverse mortgage reforms has been assisted by the mature and constructive approach taken by the reverse mortgage industry and its peak body, SEQUAL,” Mr Shorten said.

“The reverse mortgage industry anticipated the need for consumer protections and acted by introducing a robust industry code – some aspects of which are reflected in our legislation.”

In response, the peak equity release industry body (SEQUAL) acknowledged the considered approach taken by the Gillard Government in consulting with industry in order to ensure that new regulations will both protect consumers and preserve choices for Senior Australians facing the challenge of funding their retirement.

The SEQUAL Chief Executive, Kevin Conlon confirmed that Government had been willing to take the existing high standards of practice within the Australian equity release industry into account in order to avoid an unnecessary regulatory burden on this rapidly growing market. “This has been a very good example of effective consultation between Government and industry which has resulted in meaningful outcomes for consumers”, he said.

Conlon argues that, “With the emergence of the Australian equity release market, senior Australians now have the ability to tap into the stored wealth of their home in order to live well in retirement and importantly, stay in their home”.

The introduction of the Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 in the House of Representatives, reinforces the consumer protection initiatives introduced by SEQUAL which were described by the Assistant Treasurer as “a robust industry code” and ensures that all equity release providers must meet these standards.

However, Kevin Conlon warned that there is much more that needs to be done in order to protect the entitlement of Senior Australians to access their wealth in order to live well in retirement. “We continue to encourage Government to develop effective programs to improve the financial literacy of those facing the challenge of funding their retirement”, he stated.

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