ASIC has released a consultation paper seeking public comment on proposals designed to ensure that consumers have timely access to dispute resolution if they have a problem with consumer credit or margin lending.
The paper explains how ASIC proposes to apply the dispute resolution requirements for credit providers, brokers and other credit licensees and their representatives, margin lenders and those who give advice on margin loans once the National Consumer Credit Protection Bill and margin lending reforms come into effect.
The dispute resolution requirements are similar to those that currently apply to holders of an Australian financial services licence and their representatives.
Credit licensing commences on 1 January 2010 and credit licensees will be required to have dispute resolution arrangements that include an internal dispute resolution (IDR) process that meets ASIC’s approved standards and requirements.
They will also need to have membership with an ASIC-approved external dispute resolution (EDR) scheme.
Those licenced to provide margin loans or advise on margin lending will need to meet the same two requirements from the time the margin lending reforms come into effect.
In its consultation paper, some of the key proposals ASIC is consulting are that during the credit registration phase, prior to the requirement for credit licensing, EDR schemes should be able to hear complaints about a member without the complaint first going through an IDR if the member doesn’t yet have an IDR process.
This will enable EDR to work more smoothly by elimnating the need for an IDR procedure as a first step in all cases, ASIC said.
Another key proposal which ASIC is consulting on is that urgent matters involving hardship variations and postponement of enforcement proceedings should be able to by-pass IDR and go straight to EDR.
Submissions close on 11 September, 2009
