Concern at scope of consumer credit regulation

The chief executive of Sequal, Kevin Conlon, has voiced concern at statements the Minister for Superannuation Nick Sherry made to include reverse mortgages in a plan for greater regulation of consumer credit.

Sherry’s statements were made in a paper on the Federal Government’s $71 million proposal for national regulation of consumer credit, which includes the Uniform Consumer Credit Code legislation.

This proposal follows agreement at the March and July Council of Australian Government meetings, and again yesterday, to transfer consumer credit to the Commonwealth Government.

Sherry referred to the “possible regulation” of reverse mortgages within phase two of the regulatory plan, which includes “moves to reduce predatory or undesirable lending practices”.

“It concerns me that comments from Minister Sherry overnight tend to bundle into a broader discussion on finance broking a reference to reverse mortgages,” Conlon said.

“The markets are different, the demand is different, and the consumer protection needs are different.” There is “clearly the need for an equitable and efficient seniors’ equity release market”, Conlon said, but “significant consumer benefit can arise only when the impact of regulatory change is carefully considered”.

“I would be concerned if [reverse mortgages] were referred to in the broad context of the need for national regulation of finance broking without there being a proper understanding of the importance of a meaningful consultative process between industry and regulators and the Government.”