The Independent Reviewer has published an Issues Paper(pdf) which outlines
draft recommendations on changes to the Code of Banking Practice. The recommendations include a recommendation that a general principle of responsible lending be included in the set of guiding principles for the Code.

The Ministerial Council for Consumer Affairs (MCCA) has agreed to reform the scheme of Mandatory
Comparison Rates in the Consumer Credit Code. There was in principle
agreement to repeal the requirement to provide consumers with
“schedules” of comparison rates, while the format and calculation of
comparison rates in credit advertisements will be substantially
revised.

MCCA has publicly released the Final Impact Statement on Mandatory Comparison Rates (pdf).

The Statement concludes that:

The effect of ceasing the MCR regime would appear to have minimal negative impacts on credit providers and a slightly increased risk of confusion for consumers that is partly offset, in the mortgage industry particularly, by the existence and growing use of secondary market players: independent information providers and brokers…

It has not been possible to demonstrate that a net benefit to the community will be derived from the continuation of the MCR regime in its current form, resulting in a strong case for MCR to sunset.

The
Australian Prudential Regulation Authority (APRA) has released
the APRA Service Charter (pdf) which explains how APRA
carries out its role and what those who deal with the prudential
regulator can expect.

The Treasurer has introduced the 3 Bills that contains the legislation for First Home Saver Accounts:

• The First Home Saver Accounts Bill 2008,
  which establishes the accounts, provides for the payment of the
  Government contribution and governs their operation and prudential
  regulation.
• The First Home Saver Accounts (Consequential
  Amendments) Bill 2008 which contains consequential amendments to other
  Commonwealth laws, chiefly the taxation and corporations law.
• The Income Tax (First Home Saver Accounts Misuse Tax) Bill 2008 which imposes
  the misuse tax to clawback benefits obtained by an account holder who
  improperly uses the accounts.

The  main features of the accounts are as follows:

• An individual can open an account if they are aged 18 or
  over and under 65; have not previously purchased or built a first home
  in which to live; do not have, or have not previously had, a First Home
  Saver Account; and provide their tax file number to the provider.
• Personal contributions can be made by the account holder or a parent or
  grandparent, and can only be made from after-tax income.
• The account is supported by Government contributions.  The Government
  will contribute an extra 17 per cent on the first $5,000 of personal
  contributions made into the account each year.  This will be indexed to
  average weekly ordinary time earnings.  This means that an individual
  contributing $5,000 will receive a Government contribution of $850.
• There is an overall account balance cap of $75,000, which is indexed to
  average weekly ordinary time earnings.  Earnings can still accrue once
  the cap is reached.
• In addition, earnings on account
  balances are taxed at the account provider level at the statutory rate
  of 15 per cent, rather than in the hands of the individual account
  holder at their marginal tax rate.
• As a general rule, in
  order to access money to purchase a first home, personal contributions
  of at least $1,000 must have been made in each of at least four
  financial years.
• Individual contributions are not taxed as
  they are made from after-tax income; Government contributions are not
  taxed and withdrawals to purchase a first home are not taxed.

From 1 October 2008, accounts can be offered by banks, building
societies and credit unions, public offer superannuation providers,
life insurance companies, and friendly societies.

The  Bill also provides a framework to prudentially regulate public offer superannuation  providers. 

Providers that are banks, building societies and credit unions; and
life insurance companies will continue to be prudentially regulated
under the Banking Act 1959 and Life Insurance Act 1995 respectively.

The MCCA has agreed to refinements to the
Consumer Credit Code. The amendments are intended to enhance the operation of the
Consumer Credit Code by:

1. Tightening current exemptions to the Code for short term credit and pawnbrokers ;
2. Dealing with abuses of business purpose declarations aimed at avoiding the Code;
3. Enhancing consumer remedies under the Code by broadening existing powers of courts to review credit fees and charges and changes of interest;
4. Providing Government Consumer Agencies with standing to conduct proceedings under the Code on behalf of consumers;
5. Prohibiting lenders from taking ‘blackmail’ security over essential household items; and
6. Requiring that consumers be provided with information about their rights and responsibilities regarding direct debit payment arrangements

The Reserve Bank has undertaken an extensive review of settlement
practices in the Australian equity market (pdf). This review sets out some
possible modifications to current arrangements in order to avoid the significant delays in the settlement of Australian equities which occurred on 29 and 30 January 2008.