Financial Services Inquiry: Submission on the Draft Terms of Reference

Consumer Credit Legal Centre commented on the Draft Terms of Reference for the Financial System Inquiry. The Terms of Reference give broad scope to address a wide range of issues of concern to our organisation. (See Press Release from Treasury)

Our comments have been made in the interests of ensuring the inquiry, which is no doubt likely to be dominated by the concerns of financial service industry participants, keeps a firm eye on the end-users of the financial system. The financial system has the potential to create significant benefits for (or cause significant harm to) the community as a whole, or particular groups within it.

Summary of CCLC’s Recommendations

1. The TOR should specifically mention access to the financial system or financial inclusion.
2. TOR 2.1 should be amended to recognise that competition, efficiency and innovation are not objectives in themselves, but are only beneficial to the extent that they contribute to achieving optimal end-user outcomes.
3. TOR 2.3 needs to include the benefits of regulation (to consumers, the market as a whole and the public interest) in addition to its costs and impositions; whether the objectives of the regulation are being met, and whether there are alternatives (including alternative regulation) that would meet the objectives more effectively.
4. There should be a panel representative with experience and expertise in consumer policy and financial inclusion.