Financial Sector Reform 2022

✦ Plain-English Summary

# Financial Sector Reform Bill 2022

## What it does

This bill updates the rules for how Australia's banks, insurers, and financial companies are run and held accountable. It creates a safety net (called a "compensation scheme of last resort") to protect people's money if a financial institution collapses, and tightens the rules around lending, especially for small loans and leasing arrangements.

## Why it matters

If your bank or financial adviser goes under, there's now a clearer process for getting your money back. The stricter lending rules mean lenders can't dodge responsibility as easily when they give out dodgy loans—which directly affects whether you'll be offered predatory deals on small loans or car leases.

## Key details

- **Compensation backstop**: Creates a last-resort fund to compensate customers when financial firms fail, filling gaps left by existing schemes
- **Consumer credit tightening**: Makes it harder for lenders to offer "small amount credit contracts" (high-interest short-term loans) without proper checks, and restricts dodgy referral arrangements between lenders
- **Phased changeover**: Replaces the old "banking executive accountability regime" with a new "financial accountability regime" across banks, insurers, and super funds—giving regulators clearer enforcement powers during the transition

Official Description

Introduced with the Financial Accountability Regime Bill 2022, Financial Services Compensation Scheme of Last Resort Levy Bill 2022 and Financial Services Compensation Scheme of Last Resort Levy (Collection) Bill 2022, the bill amends: 12 Acts to make amendments consequential on the new financial accountability regime; the Australian Prudential Regulation Authority Act 1998 and Banking Act 1959 to make amendments consequential on the end of the banking executive accountability regime; the Corporations Act 2001 , Australian Securities and Investments Commission Act 2001 and National Consumer Credit Protection Act 2009 to establish the financial services compensation scheme of last resort to provide compensation to eligible consumers where the Australian Financial Complaints Authority has made a determination in their favour that remains unpaid; the National Consumer Credit Protection Act 2009 to impose additional obligations on providers of small amount credit contracts and consumer leases; and the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 to include application provisions.

Committee Referrals

Senate Standing Committee for the Scrutiny of Bills; Senate Economics Legislation Committee

Full bill PDF →APH page →

Audit History

Introduced

8 Sept 2022

Last updated on APH

10 Apr 2026

Outcome date

12 Dec 2022

Last checked by Crossbench

yesterday

Full text indexed

yesterday

🗳️

No formal division recorded

This bill passed by voice vote — parliament agreed without calling a formal count. A division is only recorded when a member explicitly requests one.

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