Australian Credit Licence obligations

There has been some encouraging movement within the intermediated finance market of late.

We’re certainly not booming, but Analysts report signs of a ‘bounce’ from the pre-election lull.

We’ve seen most lenders reduce interest rates, consumer confidence has strengthened and the share of new loans written by Finance Brokers is at an all-time high.

These heartening signs lay promise to better times ahead and for those of you who have ‘dug in’ and battled through some recent tough times, it’s important you now ensure your house is in order and subsequently take advantage of more bountiful times.

If you’re an ACL holder, we recommend you check up on your obligations now

To further strengthen this point, we draw your attention to ASIC’s recently announced increased budget for the supervision and surveillance of credit intermediaries. Over the next year they are budgeting $753k for this purpose alone and an extra $1.47m for enforcement. In other words, ASIC is now following through on Commissioner Hayne’s recommendations to get tougher on the participants within our industry, including brokers and dealers.

Whilst the above may seem only relevant to the ‘bad apples’ that we agree should be out of industry; this view would be misguided. ASIC is very focussed on governance, in addition to misconduct.

As way of illustration, 48 Credit Licenses have recently been cancelled or suspended by ASIC purely because they did not have their AFCA membership up to date. We have also seen recent evidence of ACLs being suspended for inadequate PI Insurance and inappropriate record keeping.

If you haven’t done so recently, we recommend you conduct a stocktake of the following mandatory aspects of holding an Australian Credit Licence:

  1. Disclosure documents: Are they up to date and compliant with NCCP requirements?
  2. ACL General Obligation policies: Do you have all those required and are they customised to your business?
  3. NCCP Registers: Are yours and those of your Credit Reps current?
  4. AFCA: your annual renewal is due at end of the month by the way.
  5. CPD: are you and your team on track for at least 30 hours?
  6. Governance Framework: Every ACL must have a customised compliance plan.

We believe that strong operational and compliance-related procedures will set you and your business up for sustained success. Plus, by knowing everything ‘is in order’ you should be able to sleep better at night!

If you’d like help in reviewing your current framework, we can help too.