Banks not ‘a-loan’: APRA to receive supervisory powers over non-ADI lenders
July 2017 saw the Treasury Laws Amendment (Non-ADI Lender Rules) Bill 2017 (Draft Bill) being released for public consultation with submissions closing on 14 August 2017.
The Draft Bill aims to provide the Australian Prudential and Regulatory Authority (APRA) with unique supervisory powers over entities who are not authorised deposit taking institutions (non-ADI lenders).
The Draft Bill would:
- amend the Banking Act 1959 (Cth) to provide APRA with the power to develop and implement rules in respect of the lending activities of non-ADI lenders, including powers to issue directions and introduce penalties for non-compliance; and
- amend the Financial Sector (Collection of Data) Act 2001 (Cth) to allow APRA to collect data from non-ADI lenders for the purposes of monitoring their lending activities and determining when to exercise their new powers.
These amendments have been proposed in light of the Australian Government’s 2017-2018 Budget announcement to ensure that APRA is able to respond flexibly to financial and housing market developments that pose a risk to financial stability.
The overall effectiveness of the amendments remains to be seen, particularly in circumstances where the Australian Securities and Investments Commission (ASIC) continues to retain oversight over non-ADI lenders.
For more information, please contact ERA Legal.
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