The MFAA has raised concerns with Treasury that the External Dispute Resolution system has “overstepped its original purpose”.
MFAA president Phil Naylor said this view was shared by many industry groups attending a recent Treasury briefing on the upcoming Financial System Inquiry (FSI).
The EDR system “seems to have drifted from being a ‘dispute resolution’ body, as intended, to a consumer protection body,” Naylor told Australian Broker
“We haven’t yet defined our position but essentially EDR should focus on being an independent facility for settlement of disputes.”
Naylor also has similar concerns for the NCCP legislation, saying a focus for the MFAA will be “ensuring that NCCP sticks to the general principle of ‘responsible lending’ without attempting to micro-manage the operations of the industry”.
Difficulties surrounding an excess of regulators in the Australian financial system were also mentioned at the briefing. The view that ASIC, in particular, was getting in the way of a more efficient and effective system was raised, said Naylor.
Other key concerns for the MFAA in relation to the FSI would be lending competition and access to funding, he said.
The MFAA indicated that the terms of reference for the inquiry were wide enough to cope with their concerns.
“Taken at face value (and the end result will depend on the Committee itself), there seems to be a sincere attempt by Government to totally review the system, with no sacred cows and no fixed views as to the outcome. The focus will be on whether the financial system is ‘fit-for-purpose’ for the next decade or so.”