The government has introduced the Financial Sector Reform (Hayne Royal Commission Response – Protecting Consumers (2019 Measures)) Bill to address four recommendations from the Hayne Royal Commission.
An announcement by the Treasurer, Josh Frydenberg, said the four recommendations being legislated were:
Recommendations 1.2 and 1.3, which would apply from 1 July 2020:
- Requiring mortgage brokers to act in the best interests of consumers when providing consumer credit assistance;
- Reforming mortgage broker remuneration by requiring the value of upfront commissions to be linked to the amount drawn down by borrowers instead of the loan amount;
- Banning campaign and volume-based commissions and payments; and
- Capping soft dollar benefits.
- Ensuring the consumer protection provisions of the financial services law apply to funeral expenses policies.
Recommendation 4.7, which will apply from 5 April 2021:
- Banning unfair contract terms in standard insurance contracts.
In addition, they would also introduce Financial Sector Reform (Hayne Royal Commission Response – Stronger Regulators (2019 Measures)) Bill, which implemented a further four additional commitments the government had announced at the time of responding to the Royal Commission.
This was to ensure the Australian Securities and Investments Commission (ASIC) could effectively enforce existing laws.
Frydenberg said restoring trust in Australia’s financial system was part of their plan for a stronger economy.
“The Government is taking action on all 76 recommendations contained in the Final Report of the Royal Commission and, in a number of important areas, is going further,” Frydenberg said.