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New APRA powers to address financial stability risks - non-ADI lender rules

17 July 2017 | Exposure Draft

The Government announced in the 2017-18 Budget that it would act to ensure that the Australian Prudential Regulation Authority (APRA) is able to respond flexibly to financial and housing market developments that pose a risk to financial stability, by providing APRA with new powers in respect of the provision of credit by entities that are not authorised deposit-taking institutions (non-ADI lenders), to complement APRA’s existing powers in respect of ADIs.

This consultation seeks stakeholder views on the draft Treasury Laws Amendment (Non-ADI Lender Rules) Bill 2017 (the draft Bill) which implements this measure. Draft explanatory materials are provided to assist readers in understanding the draft Bill.

Consistent with the Budget announcement, the draft Bill would:

  • amend the Banking Act 1959 to: provide APRA with a power to make rules concerning the lending activities of non-ADI lenders for the purpose of addressing financial stability risks (‘non-ADI lender rules’), provide APRA with a new power to issue a direction to a non-ADI lender should the entity fail to comply with a non-ADI lender rule, and introduce penalties for non-ADI lenders that fail to comply with a direction by APRA; and
  • amend the Financial Sector (Collection of Data) Act 2001 to allow APRA to collect data from non-ADI lenders for the purposes of monitoring their activities and determining when to use its new powers.

The consultation on the draft Bill will close on Monday, 14 August 2017.

Making a Submission

Interested parties are invited to comment on the review.

While submissions may be lodged electronically or by post, electronic lodgement is preferred. For accessibility reasons, please submit responses sent via email in a Word or RTF format. An additional PDF version may also be submitted.

All information (including name and address details) contained in submissions will be made available to the public on the Treasury website unless you indicate that you would like all or part of your submission to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Respondents who would like part of their submission to remain in confidence should provide this information marked as such in a separate attachment.

Legal requirements, such as those imposed by the Freedom of Information Act 1982, may affect the confidentiality of your submission.

Closing date for submissions: Monday, 14 August 2017

Address written submissions to:

The Manager
Banking, Insurance and Capital Markets Unit
Financial System Division
The Treasury
Langton Crescent
PARKES ACT 2600

For enquiries please call Pat Mahony on +61 2 6263 3237.

Key Documents

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