Strong self-regulation of the reverse mortgage and equity release sector will mean an impending Government regulatory review will only be a "health check", according to SEQUAL.
The Government intitiated its second stage of reforms to consumer credit law this week with the release of its Phase Two Green Paper, which outlines options for enhancing the National Consumer Credit Law in areas that include the reverse mortgage sector.
SEQUAL chief executive Kevin Conlon said any reforms would not impact the majority of providers in the sector, as SEQUAL's membership, consisting of 95% of reverse mortgage providers in the market, already meet voluntary standards that are now expected to be legislated.
Expectations are the revisions will introduce a no negative equity guarentee as a statutory requirement, and require that reverse mortgage providers produce a generic consumer statement to assist clients to understand reverse mortgage products.
Conlon says as members of SEQUAL, 95% of the industry already meets these standards.
The review may also develop guidelines around the scope of advice, to ensure that financial advice on reverse mortgage products is accessible and affordable.
SEQUAL had expressed concern that the reverse mortgage sector was being reviewed alongside the likes of fringe and payday lending, as part of phase two of the legislative overhaul.
However, Conlon said this was because the reverse mortgage market was “in good shape”, so the priority for reviewing the sector was not as high as other areas.
Conlon expects the consultation process will be concluded within the next few months.
