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Regulation of business and investment lending

Treasury is currently considering options for regulation of business and investment lending. Did you know that to a large extent it is already regulated?

Most credit businesses are Australian credit licensees or credit representatives, and so are members of an external dispute resolution (EDR) scheme.

The jurisdiction of EDRs extends to credit provided to individuals (ie natural persons) and small businesses irrespective of whether the credit is regulated by the National Credit Code. Accordingly, loans to individuals and small businesses for investment purposes (eg to buy shares, buy art work, general business finance) can be the subject of disputes at EDR. (Loans to individuals to purchase or refinance residential investment properties are already subject to the National Credit Code and margin loans are financial products so these borrowers already have access to EDR.) More…