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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.


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BFCSA: Financial services: the blitz begins as new regulations kick in

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Financial services: the blitz begins as new regulations kick in

The Australian 12:00am April 5, 2019

Joyce Moullakis, Michael Roddan


An era of stronger regulation and enforcement is set to begin in financial services, allowing shoddy products to be weeded out earlier and the banking regulator to compel underperforming superannuation funds to merge or exit the industry.

Parliament has passed a wave of new legislation including Treasury Laws Amendment bills — which aim to beef-up the powers of financial regulators — and separate legislation to help mutual lenders more easily raise capital.

Among other things, the bill relating to the Australian Prudential regulation Authority will empower it to collect data on expenses from super funds to “better understand whether trustees are spending members’ money in line with their obligations”.

The James Shipton-chaired Australian Securities & Investments Commission gets formal product intervention powers, enabling it to step in if a product risks causing consumer harm. The amendment also introduces obligations on financial products spanning from design to distribution.

The need for enhanced powers for regulators and greater penalties for financial companies that do the wrong thing became increasingly evident following damning revelations made at the Hayne royal commission.

ASIC yesterday imposed additional licence conditions on AMP’s financial planning arm to ensure advisers are adequately trained and maintain records.

That follows surveillance and an application by AMP to broaden its licence to provide managed discretionary accounts.

The regulator also hit private group SMSF Advisers Network with additional licence conditions after finding statement of advice documents “relied heavily on templated wording and many of the client files lacked evidence to support the advisers’ recommendations that clients establish a SMSF”.

Treasurer Josh Frydenberg told The Australian transparency and accountability were paramount in the superannuation sector, particularly as it had grown to more than $2.7 trillion.

“This legislation will help safeguard the retirement savings of millions of Australians and ensure APRA can take effective action, including addressing underperformance and compliance with the best interests duty,” he said.

The Treasury Laws Amendments (Improving Accountability and Member Outcomes in Superannuation Measures No 1) includes measures and sweeping powers for the regulator to drive better outcomes for members and address poor performance.

“Previously, APRA could only direct a superannuation trustee after a contravention of the law had taken place or where APRA believed there was an urgent, material threat to members’ interests,” APRA’s deputy chair Helen Rowell said.

“The new directions power gives APRA the ability to intervene at an early stage before members suffer significant harm.

“The new civil penalties that may be imposed on trustees and directors for breaches of their section 52 and 52A duties will now attract both civil and criminal consequences.

This, combined with the broader directions power, gives APRA much greater leverage to influence trustee behaviour from the outset.

“In some instances, acting in the best interests of members will require underperforming funds to merge or exit the industry.

Ms Rowell warned of “serious consequences” if super trustees and their directors did not meet best interest duties to members.

Industry Super Australia’s deputy chief, Matthew Linden, said the amendments would “put the acid on trustees to perform or exit the industry”.

“From when the bill was introduced in September 2017, Industry Super Funds argued the bill needed to be strengthened to protect members irrespective of the type of super fund or product they were in,” Mr Linden said.

“This sets out the regulatory framework that will pave the way to weed out dud, underperforming super funds and products — giving consumers confidence.”

The legislation also requires trustees to conduct an annual outcomes assessment against prescribed benchmarks, including for MySuper and choice super products.

In a joint statement on the ASIC-related legislation, Mr Frydenberg and Assistant Treasurer Stuart Robert said the reforms provided improved consumer protection.

“While Commissioner Hayne did not recommend these expanded powers and obligations, he noted ‘the reforms recognise that current disclosure requirements are not, on their own, sufficient to inform consumers fully’ and suggested that they ought to be extended to all financial products and credit products,” they said in a statement.

ASIC chairman James Shipton said the reforms would provide “invaluable assistance” as the regulator sought to rebuild the public’s trust in the banking and wealth sectors.

“These new powers will enable ASIC to take broader, more proactive action to improve standards and achieve fairer consumer outcomes in the financial services sector,’ he said.

The Financial Services Council welcomed the changes but called for ASIC to build a “clear framework” for how the new regime would operate.

“While the vast majority of Australians benefit from quality products, this new regime offers an extra layer of protection,” FSC boss Sally Loane said.

The additional regulatory powers are coupled with beefed up enforcement activity, after both APRA and ASIC copped heavy criticism during the Hayne royal commission for not taking a hard line approach against the companies they regulate.

Separately, the Customer Owned Banking Association welcomed the passage of a reform bill for the mutual sector.

The legislation addresses recommendations made in the Hammond Review to improve the ability of credit unions, building societies and mutual banks to compete with large banks.

The bill amends the Corporations Act to define a mutual entity, reform demutualisation rules and assist the sector to more easily raise capital by creating a Mutual Capital Instrument.

“Being able to raise capital will allow customer owned banking institutions to allocate more funding to projects that will deliver greater choice and competition,” COBA chief Michael Lawrence said.


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