Doug Shave

Doug Shave

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    Government moves on Gunning recommendations

    16/09/2000 7:00 AM
     
    16/9/00


      Fair Trading Minister Doug Shave has announced proposed amendments to the Finance Brokers Control Act 1975 as recommended by the Gunning Inquiry into the Finance Brokers Supervisory Board.

      “The proposed changes to the Act will increase protection for people dealing with finance brokers,” Mr Shave said.

      “The Government is committed to implementing these initiatives quickly.”

      The Gunning Report on the Finance Brokers Supervisory Board was tabled in Parliament on September 5 and Cabinet has endorsed in principle all of the report’s 28 recommendations.

      Recommended changes to the Act include:
      • the term “finance broker” to exclude persons or corporations subject to regulation under Commonwealth law.
      (Recommendation Two);
      • the term “finance brokers” to apply only to those who arrange and/or manage loans on behalf of private lenders and private borrowers. Finance intermediaries who arrange loans from a “credit provider” within the meaning of the Consumer Credit Code are excluded (Recommendation Four);
      • definitions of “finance broker” and “finance broking activity” will be added to include those involved in the business or activity of managing mortgages. This will confirm the Board’s ability to regulate such conduct through the Code of Conduct (Recommendation Five);
      • enabling the Board to impose blanket conditions on all licensed finance brokers and include a condition to require all licensed finance brokers to maintain adequate professional indemnity insurance (Recommendation Six);
      • precluding anyone from carrying on business as a finance broker who-
      - has been convicted of an offence of dishonesty
          - has been suspended or disqualified from carrying on an occupation in any other State or Territory or the Commonwealth
          - is an undischarged bankrupt or subject to a composition or deed of arrangement or assignment which has not been finalised
      - has in the last five years been a director of a corporation which in that period has been the subject of any form of insolvency administration
      - ( Recommendation Eight);
      • a person who conducts activities on behalf of a licensed broker will also be subject to the Act and the Code of Conduct (Recommendation Eight); and -
      • increasing the maximum penalty for breach of the Act or Code of Conduct from $1,000 to $20,000 (Recommendation Sixteen).

      In addition to the recommendations of the Gunning report, Cabinet agreed to amend the Act to-
      • replace the two elected finance brokers who sit on the Board with a finance broker and a consumer representative to be appointed by the Governor; and -
      • apply the same standards applied to other Boards and Committees in the Fair Trading portfolio to the Finance Brokers Supervisory Board with regard to the capacity of the Minister to direct the Board, the requirement of the Board to provide a strategic plan, and the provision of information to the Minister by the Board.

      Other recommendations of the Gunning Report will be the subject of legal advice and consultation.

      Media contact: John Clune 9213 6500