Commercial lending regulation off the table ... for now

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Any proposed regulation of small business credit has now been deferred, as the Government now says it wants to take time to get reforms right.

 

The Government previously raised eyebrows in the commercial lending and broking sector with proposed guidelines that would have regulated commercial lending. The proposed legislation had raised concerns among brokers, who said it could restrict access to business credit.

 

According to Gadens Lawyers, Treasury has now announced it will put off any action on small business finance.

 

"Treasury's release said that the Government considers that it is important to get the reforms right, given the important role that small businesses play in the Australian economy," Gadens said.


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  • Country Broker on 19/02/2013 11:17:28 AM

    Common sense has prevailed here , the proposed reforms were not suited to small business credit requirments , and more consultation is needed .
    Strongly suspect whoever wins the next election it will come back on the agenda , hopefully after a lot of consultation. Good kob to both the MFAA & FBAA in their lobbying effortys. The industry bneeds to continue to emphasise the fact SME lending is complex , and is not like any NCCP deal.

  • Lyn Turner on 19/02/2013 10:48:56 AM

    It's a shame the Government didn't put the same careful effort into consumer lending legislation and regulation - it's incredibly ill considered and poorly constructed. At some point the ramifications are going to harm consumers and be felt throughout the finance industry - just when the voters are going to the polls. Not good timing Minister Shorten!

  • Mike Clarke on 19/02/2013 10:32:33 AM

    Very pleased to see more consultation occurring as this is a more complex area of lending & cannot be viewed from the same perspective as consumer lending. An important point to note here is that lending in the SME space requires the same general 'risk' assessment as if you were lending in the 'corporate' space. There may be more drilled down specialised areas when dealing with bigger tranches, but in the end fundamental risk analysis remains the same. Flexibility & a certain amount of recogntion for the entrepreneurial aspect is needed when it comes to accepting 'risk' with commercial lending.

  • John C on 19/02/2013 10:23:37 AM

    Thank God for that! The Government has interfered far too much already to the detriment of small business.

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