Brokers fail to avoid new finance laws

The mortgage broking industry has failed in its attempt to gain exemption from being regulated by the new Financial Services Reform Act. The industry could not persuade Treasury that it should be exempted and has now turned its attention to ASIC, requesting exemption from the watchdog's licensing requirements.

The industry is arguing that as a credit provider it should not come under the federal act as credit provision is regulated by the states, even when providing deposit accounts as part of mortgage loans. But draft amendments to the FSRA released at the end of August said that deposit-taking accounts won't be exempted.