Treasury has released an exposure draft of a banking regulation amendment designed to open up the credit market, with changes to take effect on January 1 next year.This follows Sunday's announcement by the Minister for Finance, Mathias Cormann, that the Government planned to increase competition in the industry by expanding credit card issuing and acquiring to non-authorised deposit-taking institutions.The draft regulation says the card schemes, Visa and MasterCard, will be responsible for determining which entities may become card issuers or acquirers, subject to a risk management framework imposed by the Reserve Bank.The class of ADIs called 'specialist credit card institutions' will be abandoned.All new entrants will need to meet the same consumer credit regulations that apply to ADIs under the National Consumer Credit Protection Act.Cormann said the Government was acting on recommendations made by the Payment System Board in a report on payments card access regimes in March. In that report, the PSB said conditions in the credit card market had changed in recent years. MasterCard and Visa had changed their corporate structures to become listed companies rather than member associations of banks."This suggests that the schemes are likely to be more open to new types of participation," the PSB said.At the same time the emergence of new business models in payments was creating stronger interest in scheme membership.The PSB also said that the regulatory requirements for specialist credit card institutions reflected the Australian Prudential Regulation Authority's focus on deposit-taking institutions and were more onerous than necessary for the risks generated in credit card markets."This means that some participants may be deterred from seeking scheme membership, while others that seek membership may face higher than warranted costs," the PSB said.