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ISCOVER
Staff Reporter
The Australian Securities and Investments Commission has released updated guidance on mortgage exit fees for residential loans.
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The updated guidance takes into account the effect of the National Consumer Credit Protection Regulations 2010 which prohibit termination fees for residential loans, subject to some exceptions.
The effect of the regulations on RG 220 is that the guidance in RG 220 is now only relevant to credit contracts for residential loans with early termination fees, that were entered into before 1 July 2011, or loans that contain early termination fees which are not prohibited by the regulations.
The amendments to RG 220 do not represent substantive changes in ASIC’s policy, rather they reflect a change in the scope of our guidance as a result of the regulations.
The amendments to RG 220 are a technical update in light of the prohibition on termination fees, including early termination fees, in regulation 79A of the National Consumer Credit Protection Regulations 2010.
