Lenders and brokers yesterday expressed strong opposition to a proposal by Australia's government that consumer lending be jointly regulated by federal and state and territory bodies. Treasury issued a Green Paper on reform of credit regulation, Financial Services and Credit Reform, in which it outlined a range of possible changes to the regulation of mortgages and other credit products, mortgage broking, non-deposit taking institutions, trustee corporations, margin lending and debentures.The most controversial of the proposals is that a national body regulate mortgages, including reverse mortgages, and license credit providers and brokers, while states and territories continue to play a role in the regulation of other forms of consumer credit.Industry leaders said such a scheme would result in the industry answering to nine regulators instead of the current eight. They argued that it would do nothing to overcome the biggest problem with the current uniform state-based system, which was the level of inertia that made legislative change near impossible.In March a meeting of the Council of Australian Governments agreed to the Commonwealth assuming responsibility for regulating mortgage credit and advice. Since 1993 the states and territories have regulated consumer credit through uniform credit law, the Consumer Credit Code. The most common criticism of the current system is that it is hard to change the law because of the need to build a consensus among the states and territories. As the industry has developed, gaps have emerged in regulatory coverage.Mortgage broking has been largely unregulated or self-regulated.The Green Paper puts forward three options for regulatory reform. Option one proposes that the states and territories would continue to regulate under the UCCC and would also adopt the National Finance Broking Bill.The paper says this approach would result in delays, inconsistencies and continuing gaps in coverage.Option two is for national regulatory coverage of mortgages and other forms of consumer credit such as credit cards and personal loans.The paper says this would have the advantage of having all regulation at one level of government but would involve high transitional costs and would exclude the states and territories from the regulation of consumer credit. The paper says: "Certain key financial services are organised to operate in increasingly national or even international markets. However, this does not mean that all products within the financial services sector have these characteristics. "The existence of large national providers of financial products and services alone may not be sufficient as evidence of the need for a nationally uniform market."In such circumstances whilst Commonwealth regulation may be efficient for the service providers it may not adequately serve the needs of consumers. It is not self-evident that smaller loans such as personal loans are best regulated through a single national regime."Option three is for a national body to regulate mortgages, including reverse mortgages, and license credit providers and brokers. States and territories would continue to play a role in the regulation of other forms of consumer credit "where a local network and on-the-ground contacts are important considerations."A spokesperson for the Minister for Superannuation