The national consumer credit law introduced in 2010 is working effectively but there are indications that some credit providers operating on the margins are circumventing the law and exposing consumers to risk.This is the finding of the Senate Economics References Committee, which devoted a chapter in its report on the performance of the Australian Securities and Investments Commission to a review of the National Consumer Credit Protection Act.The committee recommended that ASIC do more to encourage consumers to report suspect activity. It also recommended that the regulator build capacity to monitor and research lending practices and be prepared to launch education campaigns should poor practices creep back into the industry.Surprisingly, the committee made no reference to the government 's decision not to proceed with "phase two" reforms set out in a Treasury discussion in December 2012.The phase two reforms proposed at that time included the regulation of small business lenders and brokers, the regulation of private finance arrangements, investment lending rules and regulation of indefinite and short-term leasesIn an email to stakeholders at the end of February, an official in Treasury's retail investor division said that, apart from a review of the consumer leasing sector, the government "does not plan to progress any further portions of the phase two credit reforms."Despite the fact that phase two reforms would have addressed some of the marginal activities referred to by the committee, it makes no reference to the need for further reform.National consumer credit law introduced a licensing regime, responsible lending obligations and oversight by the Australian Securities and Investments Commission. Conduct obligations apply to lenders and brokers.In its submission, Consumer Action Law Centre said practices had improved since 2010 and people were not experiencing losses from poor lending standards to the same extent.However, consumer advocate Denise Brailey said lenders were still relying on equity in homes to refinance loans for borrowers who did not have the capacity to service the loan.Submissions identified some gaps in the current law. The Consumer Credit Legal Centre said small business lending and forms of investment lending were not covered. Property investment advisers, who may receive commissions from lenders, were not licensed by ASIC.CALC was concerned about the activities of credit repair companies, which may charge high fees. ASIC has no oversight of the activities of these businesses.CALC said: "An effective regulator needs to be one that has the power to identify and act on new forms of consumer detriment in financial services."ASIC's main concern was that there could be a lack of competitive neutrality, where credit providers offered products that were functionally similar to regulated products but without having to meet licensing and responsible lending obligations. Examples include peer-to-peer lending and certain short-term lending practices.