THE PENALTY for unlawfully carrying on business as a finance broker increased 100-fold from $500 to $50,000 in Western Australia, as of October 31.
The change was one of a set of amendments to the WA Finance Brokers Control Act, which included: the abolition of the Finance Brokers’ Supervisory Board, to be replaced with a Commissioner (initially the Commissioner for Fair Trading); appointment of officers of the Department of Fair Trading to investigate complaints; discipline of finance brokers to come under the jurisdiction of the State Administrative Tribunal.
Gadens Lawyers partner John Denovan, an expert on finance regulation who had monitored the legislative developments, said that although 31 October had been mooted as the commencement date for the amendments, the finance industry had assumed another date would be set due to a lack of communication “for many months”.
In response to a request for clarification of certain amendments from Denovan, Minister for Consumer and Employment Protection, John Kobelke, responded that he recognised the problems businesses would face in complying with the new regulatory regime.
He confirmed that during the transition period the Department was not expected to take action against those who might be affected, especially where an exemption was being considered. Denovan said brokers and finance managers who might be affected by the amendments could take comfort from that response.
The Department had called for submissions on the changes from industry associations and Kebolke also indicated that exemption applications would be dealt with as quickly as possible.
An exemption for ‘up the line’ operators, among others, could be considered. Amendments to the Act also include a broadening of the definition of finance broker to include mortgage bankers and the removal of the need for a finance broker to hold a business certificate.
Denovan said the Code of Conduct for finance brokers in Western Australia was also being revised, and was still under consideration.