At a recent meeting in Parliament House the Minister for Financial Services Bill Shorten announced that the government had decided to withdraw its proposed laws to specifically regulate the provision of credit to small business borrowers. Instead the status quo of industry self-regulation will prevail.
The key proposal had been that lenders, goods lessors and finance brokers would have been required to obtain a permit to offer credit to small business customers. The permit would have issued upon a credit party registering with the government as a small business credit provider.
As the proposed amending legislation would have fallen under the National Consumer & Credit Protection Act, holding a consumer credit licence under the National Credit Code would not have been enough. Conceivably therefore, had the proposed laws been introduced, a financier may have had to have held two forms of government authorisation in order to carry on business.
Relevant industry associations CAFBA (the Commercial Asset Finance Brokers Association of Australia) and COSBOA (Council of Small Business of Australia) have hailed the decision as relief from a costly and unnecessary impediment to business efficiency and customer choice.
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