The passing of the Financial Sector Reform Bill 2022 by the Albanese government provides sensible regulation to support the Consumer Lease sector in providing responsible and stable credit to Australian households.
As per our submission to the Senate Standing Committee on Economics, we endorse the Bill in its entirety. Our submission to the Senate Committee can be found here https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/FARCSLRBill2022
The Consumer Leasing industry had been left in a state of legislative uncertainty since the release of the final report from the SACC Review in March 2016. This Bill now provides RLA industry members with the certainty they require to build their businesses in accordance with a robust framework whilst providing necessary consumer protections.
RLA notes that while these laws have passed both houses, significant areas were referred to a legislative instrument to be proposed by ASIC, including the calculation of the base price of the goods and protected earnings amount.
We support the 10 per cent of net income as the protected earnings amount put forth by the government in the explanatory memorandum. However, we oppose the notion of the Recommended Retail Price (RRP) as the appropriate basis for the base price of the goods, pricing should in our view always be a reflection of the marketplace competition.
We look forward to assisting the government and ASIC in finalising the proposed regulations associated with the Bill, and trust that these additional points will be resolved expediently.
We appreciate that this Bill’s implications will significantly impact consumer lease providers and consumers. Our vision is for a fairer, more sustainable credit industry for all Australian consumers; these reforms place responsibility on businesses to innovate while preserving appropriate protections for consumers.
We encourage any organisation in the industry to reach out to Responsible Leasing Australia should they need assistance to review and consider these important reforms.
Yours sincerely
M Thomas
Mark Thomas
CEO
Responsible Leasing Australia
