Login
ISCOVER
Jessica Darnbrough
The industry watchdog is calling on all Australian Credit Licensees (ACLs) to implement better practices to ensure they comply with national responsible lending laws.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Yesterday, the Australian Securities and Investments Commission (ASIC) revealed the findings of its recent review of credit licensees in a new report.
According to the report – a review of licensed credit assistance providers’ monitoring and supervision of credit representatives – ACL holders must have the “appropriate practices in place to undertake compliance reviews of their credit representatives”.
In addition, ASIC recommended that all ACL holders have “direct access to preliminary assessments, or the documents that form the basis of the assessment”.
The report covered 18 licensees, who are responsible for more than 60 per cent of mortgage broker representatives.
While ASIC made eight recommendations to ACL holders, the report also found that most credit licensees have sharpened the supervision of their representatives since implementation of the legislation.
According to ASIC commissioner Peter Kell, ACL holders have started commencing “regular reviews of their representatives’ compliance and upgraded their IT systems to better track credit assistance provided by their representatives”.
The review also found a marked reduction in mortgage brokers suggesting and assisting borrowers to apply for low doc loans.
The volume of credit assistance for home loans promoted as low doc in the three months from 1 January 2011 – when the responsible lending obligations commenced for most home loan lenders – was nearly half that of the three months before.
Finance Brokers Association of Australia president Peter White welcomed the review and said it was pleasing to see so many licensees were obviously doing the right thing and adhering to the legislation.
“The report shows that the regulator is further monitoring and reviewing the actions of ACLs and ACRs so to give greater guidance on what is expected under the law, and the impact it has on borrowers and meeting compliance responsibilities,” Mr White told The Adviser.
Mr White went on to say he would encourage all his members to read the report and see exactly what ASIC expected of both licence holders and credit representatives.
“I recommend that everyone take the time to read the report and read ASIC’s ACL recommendations and then take the appropriate action if and where necessary,” he said.
