This document provides a high level summary of the actions taken or planned to be taken in response to each of the 76 recommendations1 made by the Financial Services Royal Commission. HAYNE RECOMMENDATION WHO2 ACTIONS TAKEN TIMING: COMMENCEMENT/PROPOSED COMMENCEMENT Recommendation 1.1 — The NCCP Act The NCCP Act should not be amended to alter the obligation to assess unsuitability G ▪ The government's response to the Commission's final report said that the government 'agrees to this recommendation and the Commissioner’s findings that "not unsuitable" remains the appropriate standard for responsible lending obligations within the National Consumer Credit Protection Act 2009 (NCCP Act)'. ▪ The National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 proposes to implement major changes to consumer credit laws including rolling back responsible lending obligations. Subject to the passage of the Bill, Schedule 1 would amend the NCCP Act so that responsible lending obligations will only apply to small amount credit contracts and consumer leases (and small amount credit contract-equivalent loans by ADIs). ▪ Subject to the passage of the Bill, the changes in Schedule 1 will generally commence the day after Assent. The proposed commencement date for the best interests obligations is 6 months after that day. 1 The table does not include actions to implement the 18 'additional commitments' included in the government's implementation roadmap. 2 G = government; I = industry Last updated 1 December 2021 Hayne Commission Recommendations: Status report Disclaimer: This update does not constitute legal advice and is not to be relied upon for any purposes MinterEllison | 2 ME_183543045_1 HAYNE RECOMMENDATION WHO2 ACTIONS TAKEN TIMING: COMMENCEMENT/PROPOSED COMMENCEMENT ▪ Consumer groups have interpreted this as contrary to the FSRC's recommendation. Recommendation 1.2 — Best interests duty The law should be amended to provide that, when acting in connection with home lending, mortgage brokers must act in the best interests of the intending borrower. The obligation should be a civil penalty provision G ▪ The Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures)) Act 2020 gives effect to the government's response to four recommendations: 1.2 (mortgage broker best interests duty); recommendation 1.3 (mortgage broker remuneration); recommendation 4.2 (removing the exemptions for funeral expenses policies); and recommendation 4.7 (Application of unfair contract terms provisions to insurance contracts). ▪ Schedule 1 which implements the government's response to recommendation 4.7: commenced 5 April 2021 ▪ Schedule 2 which implements the government's response to recommendation 4.2: commenced 18 February 2020 ▪ Schedule 3 which implements the government’s response to recommendations 1.2 and 1.3 was to commence 1 July 2020. ASIC then deferred commencement until 1 January 2021. ▪ ASIC released guidance - Regulatory Guide 273 Mortgage brokers: Best interests duty (RG 273) - on the best interests obligation in June 2020.
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