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Connexus : Issue 36
Abacus and other industry groups say the federal government needs to slow down and reconsider the consequences of its credit card draft bill. By Luke Lawler The federal government's decision to fast-track legislation to implement its 2010 election promises to reform credit cards has generated considerable friction with industry. The government's December 2010 policy statement Competitive and Sustainable Banking System said the government would "build on its new national responsible lending reforms by fast-tracking our election commitment to crack down on unfair treatment of Australians with credit cards." "The Treasury will now accelerate its industry and consumer consultations to allow the relevant legislative amendments to be introduced in the first sittings of Parliament in 2011," the policy statement said. After a round of consultations Treasury publicly released a draft bill on Friday 4 March asking for comments by Tuesday 8 March, with newspaper headlines tr umpeting 'New crackdow n on big banks'. Credit card issuers and their industry bodies, such as Abacus, the Australian Bankers' Association and the Australian Finance Conference, criticised the consultation process and aspects of the draft bill. Abacus war ned about: • the very short timeframe to respond to the draft bill, which risks creating rushed and ineffective reform with unintended consequences; • inadequate timeframes for implementing the reforms which will disproportionately affect smaller institutions such as credit unions and mutual building societies; • uncertainty about the timing of the entire reform package due to significant measures being implemented by regulations; and • extensive creep in the scope of the 'Fairer, Simpler Banking' election commitments without any appreciable benefit to consumers. NEWS connexus www.abacus.org.au 11 reforms draw heat Credit card