“We’re saying it’s better to hang off and see how the current NCCP is working before you propose more regulations. There’s a danger in over-regulating - people just won’t lend.”
Naylor said making ‘private’ loans subject to the National Credit Code will also discourage private lenders from using intermediaries, most of whom are licensed finance brokers.
“This will result in ‘private’ investors being exposed to greater risk of loss, and encourage the market to operate outside the law. We believe a better regime should require intermediaries who arrange private loans must be a licensed credit representative and subject to external dispute resolution.”
The MFAA’s submission also opposed the planned regulation of investment lending because the wide scope of this move would have a range of negative and unforeseen consequences.
“Our primary concern is that bringing this type of lending within the ACL (licensing) regime may reduce the availability of finance and reduce competition. This would limit the scope for consumers and businesses to attain the appropriate loan suited to their needs”.