The Federal Government yesterday released a Green Paper on the impending federal regulation of the credit sector. This discussion paper indicates that ASIC will soon regulate the provision of reverse mortgages to senior consumers.
The Green Paper outlines a way forward for the Commonwealth and states to transfer the remaining financial services regulation from the State level. Under the plan, delivered by the the Hon Nick Sherry, Minister for Superannuation and Corporate Law, financial services including mortgages, mortgage brokers, margin lending, non-bank lending and trustee companies, will move to the Federal level.
“This is about better protection of the Mums and Dads who take out a mortgage and deserve to know that the brokers selling it to them are reputable and upfront with their fees and charges,” said Mr Sherry.
“The Financial Services and Credit Reform Green Paper provides a plan for change – to benefit the consumer, while reducing red tape and compliance costs for business, and ensuring Australia stays ahead in the international financial services market,” Minister Sherry said.
“On mortgages, it’s absolutely critical that the advice new borrowers receive is top quality and that they are not getting into debt they can’t service. I am also concerned about reverse mortgages and the number of people taking them up without a clear understanding of the implications.”