An equity release industry body has praised the Assistant Treasurer and Minister for Financial Services Bill Shorten’s consultative approach before introducing changes to reverse mortgage regulation as part of the Government’s new credit consumer protections.
Chief executive of Senior Australians Equity Release Lenders Association (SEQUAL), Kevin Conlon, said the Government had been willing to take the existing standards of practice within the Australian equity release industry into account.
The new Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 includes a statutory no negative equity guarantee for reverse mortgages and additional disclosure requirements "to ensure consumers can use reverse mortgages with confidence".
"This has been a very good example of effective consultation between government and industry which has resulted in good outcomes for consumers," Conlon said.
During the consultation period, however, Conlon expressed concerns about possible “over-regulation” of the ever-shrinking sector. But he supported the Bill which reinforced initiatives introduced by SEQUAL, which the Financial Services Minister described as “robust”.
Conlon had also called for more to be done to protect consumers of reverse mortgages.
"We continue to encourage the Government to develop effective programs to improve the financial literacy of those facing the challenge of funding their retirement," he added.
