The Treasury yesterday issued draft regulations dealing with a ban on home loan exit fees that will take effect from July 1.Treasury has invited comment on the draft - National Consumer Credit Protection Amendment Regulations 2011 - and has set a closing date of March 1.The regulation prohibits a fee or charge payable on or in relation to the termination of a credit contract for a home loan, except if the fee or charge is a discharge or a break fee.The ban applies to new loans after July 1.Termination of a credit contract includes the "discharge or rescission" of the contract.According to the explanatory statement issued with the draft regulations, banned termination fees include those fees commonly referred to as deferred establishment fees.The ban also covers other fees that do not reflect costs borne by the credit provider as a result of terminating a loan or that seek to penalise a debtor for terminating a loan early.An allowable break-fee is a fee or charge that relates only to the early termination of a credit contract for a fixed loan and is payable as a result of a change in the cost of funds to the credit provider.An allowable discharge fee is a fee or charge that only reimburses the credit provider for the reasonable administrative cost of terminating the credit contract.