The government introduced two pieces of financial services legislation in the House of Representatives yesterday – a bill amending the National Consumer Credit Protection Act and another that includes several Hayne royal commission recommendations.
The controversial NCCP Act amendment removes the responsible lending provisions from the Act, except where they apply to high-risk lending, relying instead on APRA’s prudential supervision to regulate lending practices.
Lenders will be entitled to rely on the information provided by borrowers, in the absence of reasonable grounds to suspect that information is unreliable. This would replace the current “lender beware” approach with a “borrower responsibility” approach.
The Hayne bill, Financial Sector Reform (Hayne Royal Commission Response No.2) Bill 2020, includes several changes.
First, financial service providers that receive fees under an ongoing arrangement must send clients an outline of those fees each year and must obtain written consent before the fees can be charged.
Second, a financial services licensee must give written disclosure of lack of independence if they are providing personal advice to a retail client.
Finally, superannuation funds cannot charge ongoing advice fees if the fund member has a MySuper account.