The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP, has released draft Regulations and explanatory material for the National Consumer Credit Protection Package for further public consultation.

The key changes include:

• excluding lenders from the requirement to hold professional indemnity insurance;
• extending the streamlined licensing procedures to lenders’ mortgage insurers;
• requirements for people who audit trust accounts;
• requiring ASIC to have regard to  wheter a licensee has failed to lodge an annual compliance certificate or that a certificate is false or misleading or could not be believed to be true in deciding whether to exercise its license suspension, cancellation or variation powers;
• exempting securitisation vehicles from licensing requirements where the vehicle is a legal assignee;
• changes to various licensing and registration exemptions;
• the treatment of interest charged on credit provided to purchase or improve residential property for investment purposes;
• exempting credit or leases provided to company directors from the Code and licensing requirements;
• arrangements for the commencement of the registration period;
• application of registration, licensing and responsible lending conduct obligations to persons in relation to pre-existing contracts;
• extending the period which an unsuitability assessment can be relied upon to 120 days for credit provided for the purchase of residential properties, and secured by a mortgage over the property to be purchased;
• replicating a Queensland transitional provision to maintain its commencement date;
• clarifying that payment of an infringement notice does not affect the ability of a consumer to seek compensation orders for conduct which is the subject of a paid infringement notice;
• exempting ASIC and consumers from the general rule that proceedings must be commenced in the jurisdiction in which the consumer currently resides; and
• changes to the streamlining of Western Australian Class A and B licensed brokers into a Australian credit licence.

The key change to the fees regulations is a new method for calculating fees for lodgement of licensing applications and annual compliance certificates depending on whether a licensee is a sole trader or not and based on the sum of a business’s:

• total amount of credit advanced in the preceding financial year; and
• total value of credit in applications submitted to credit providers in the preceding financial year; and
• total amount of rent payable by consumers under consumer leases entered into in the preceding financial year.

The regulations are open for public comment between 20 November 2009 and 11 December 2009.