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With the implementation of the National Consumer Credit Protection legislation drawing ever closer, as many as a third of brokers are still unprepared for the new regime.
According to a recent Mortgage Business straw poll, only 66 per cent of brokers are ready to register for an Australian Credit Licence on 1 November.
Of the 416 respondents, 20 per cent said they had not made the necessary preparations to comply with the legislation while 14 per cent said they were unsure whether they had done enough to meet the new requirements.
Gadens Lawyers’ senior associate Elise Ivory says brokers will need around two and a half months to get ready for the new regime.
“As long as there is sufficient lead time (the final legislation is passed by mid-October and industry players act promptly and seek assistance from professionals) we believe the industry will be ready to implement the changes from 1 January 2010,” says Ms Ivory.
While some brokers and companies will be reluctant to change their current arrangements, Ms Ivory says the majority will respond by reviewing their documents and procedures in order to comply with the new laws.
MFAA will provide members with a legislation compliance pack – or in the case of larger broking groups, aggregators and lenders, a compliance program.
Although the new laws are not considered to be onerous, Ms Ivory says they should help weed out some of the unscrupulous players in the industry.
“The new laws are an attempt to balance the needs of both consumers and the industry,” she says.
Although some have described the new laws as “light”, many of the MFAA’s broker members have already fallen short of the first hurdle.
At the start of September, the MFAA terminated 1,500 memberships due to failure to complete the Certificate IV in Financial Services.
Despite a number of reminders, a minority of brokers failed to complete what is described as “the basic foundational qualification for mortgage and finance broking”.
Bernie Lewis Home Loans’ managing director Mark Lewis says he supports the MFAA’s actions and believes obtaining a Certificate IV is an absolute minimum requirement for brokers.
“The MFAA brokers had two years to complete this course and for 1,500 to not pull their finger out shows complacency and a complete lack of regard for the profession,” says Mr Lewis.
Mr Lewis says Bernie Lewis brokers are ready for the new laws, which he says will encourage professionalism in the industry.
Of course the devil is often in the detail – and the detail of the new legislation is yet to be released.
But Mr Lewis says as long as any broker requirements are made clear, the industry should have no trouble adapting to the changes.
“Regulation is essential for the evolution and ongoing professionalism of the industry,” he says.
“Until we have professional standards in place, we don’t have the right to call ourselves professionals.”
