The Motor Trades Association of Australia says the rules need better definition in the Australian Securities and Investment Commission updates to the regulatory guide on credit licensing and responsible lending.
Consultations are taking place in Sydney and Melbourne on August 12 and 19 respectively, in order to hear directly from those in the banking and finance sector.
The MTAA says in its submission the definition of regulated business entities needs clarity.
“Clearer guidance
is still needed on which specific types of businesses and persons are regulated entities,” the MTAA says.
In particular, it says the exact terms of what defines a credit provider and a credit assistance provider must be stated.
In the post-Royal Commission era, the ability to gain or retain a credit license is vital for both franchised new car retailers and used dealers, the MTAA says.
“Motor vehicle dealers are generally concerned about, on the cost-side, growing regulatory burdens and, on the revenue-side, declining sales,” the association says.
“Both are due in part to credit access,” it explains.
“This needs to be explored further by ASIC in subsequent (more-detailed) submissions by, and (in-depth) conferences with, MTAA and its members.”
The MTAA says in regards to providing guidance about the practical steps in becoming a credit licensee, the regulatory guide is “far from being in plain English, especially compared to the guides provided by other regulators like the Australian Competition and Consumer Commission (ACCC).”
The MTAA cites the Australian Public Service Commission’s website which recommends plain english as now being the Australian Government standard for communicating with the public.
With respect to the association’s members, the rules are not clear when it comes to qualify for a credit license in the guide.
“This is especially the case for the small (and even medium sized) businesses, that make up the vast majority of the auto sector,” the MTAA says.
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