Brokers to shoulder more liability from NCCP amendments

by Adam Smith08 May 2012

The submission deadline for comment on NCCP amendments has passed, and Gadens Lawyers' Jon Denovan has blasted the unintended consequences of the legislation.

Denovan has expressed concern that amendments putting more liability on brokers could hurt non-conforming lenders.

Denovan that under previous legislation, courts could potentially make decisions impacting the terms of a lender’s loan contract. However, under the proposed legislation financial redress for unfair behaviour is to fall upon brokers, according to Denovan. He said this added liability could make brokers less willing to help clients needing specialist finance.

"There’s already stories of brokers refusing to do anything other than prime lending because they’re afraid about the licensing impact," Denovan said.

"This could be just another reason for brokers to find an excuse to refuse service to those who need it the most. They’re the ones who most need the services of a mortgage broker," he added.

Denovan also took aim at a proposed cap on fees for payday lenders, labelling the move unconstitutional.

"My interpretation is that perhaps the law is unconstitutional, because it's actually preventing people from borrowing. Should people be put in a position where they simply cannot borrow money for the short term? What are they supposed to do, starve to death?" he said.

Related stories:

'Bloody ridiculous' NCCP amendments released

Shorten falls short for specialised lenders

COMMENTS

  • by Garry 8/05/2012 10:21:18 AM

    It about time the govt and its agencies stayed out of this financial sector. If the lender is prepared to take the risk on the client then that should be sufficient for the client to proceed. Its the lenders money thats at risk here not ASIC's or the government. The broker doesnt make the final decision to lend to the customer so why on earth should the broker shoulder the responsibility. If the lender doesnt do their due dilligence then its their problem not ours.

  • by Allan Faint 8/05/2012 10:22:49 AM

    the preventing of peple borrowing because of their age, yet using the term it may be unsuitable would also then be termed unconstitutional. forcing people, who want to buy a home, to continue renting is wrong. just because in maybe 10 years they may need to down size.

  • by Alex Filipovic 8/05/2012 10:46:45 AM

    A brief CV on the NCCP decision makers. Never had a proper job, never been self employed, never been held responsible for their actions, don't have a clue. My message to Shorten - demand the same standards from your colleagues as you do brokers. Something about living in glass houses.