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Consumer Credit Regulation
The Consumer Credit Code commenced operation on 1 November 1996, and for equipment financiers it represented a major improvement on the various State and Territory Credit Acts which it replaced. Leasing and equipment finance transactions made with incorporated customers are not subject to the Code nor are transactions which are wholly or predominantly for business/investment purposes and are made with sole traders and partnerships. The Code also provides for a form of consumer lease. AELA’s principal concern in relation to the Code is that commercial finance continues to be excluded from its ambit, and has been a participant which has successfully countered attempts during 2007-2008 to dilute the Code’s borrower/lessor declaration process which would have left members unclear of their compliance position when dealing with non-corporate customers.
More recently, the COAG process which agreed that the responsibility for consumer credit be transferred from the States and Territories to the Commonwealth during 2009, also raised the issue of including small business and investment finance in the same consumer protection regime. Current constrained market conditions aside, such a policy decision would be most concerning in terms of both cost and availability of finance. As previously indicated, AELA is involved in the policy development and is arguing strongly against the extension.
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