Responsible Lending changes? 

It’s certainly been a huge few weeks for those involved in the financial services industry! Since Commissioner Hayne released his final report into Misconduct in Banking, Superannuation and Financial Services, commentary on potential implications has dominated media channels. In our February newsletter we wanted to concentrate on something just as relevant to you all but has managed to slip into the public forum without much fanfare.

On 14 February, ASIC released a consultation paper titled ‘Update to RG209: Credit Licensing & Responsible Lending Conduct’.

This consultation paper puts forward a number of ASIC’s proposed changes to the regulatory guide that governs how brokers and lenders act when it comes to consumer-related finance.  The paper also seeks feedback on these proposed changes. In summary, ASIC is considering more explicit guidance on the ‘do’s’ and ‘don’ts’ of compliance with RG209 and Responsible Lending conduct.

From our perspective, we say about time!

The NCCP Act  and RG209 came into effect  on  1 July 2010  and from day  one  there has been a lack  of  guidance, advice and direction from ASIC.  This ambiguity has  resulted in many  different  interpretations,  which  has led  to confusion and in some cases a general ambivalence.

As a general rule, finance brokers (in particular) have been crying out for more support  in their quest to ‘do the right thing’.

This was a very big part of why we founded SalesKey in the first place.

This paper and the likely changes to RG209 will help all industry participants to better understand current ambiguous topics such as:

• Upscaling of inquiries
• Validation of client information
• Measurement of expenses
• Benchmarking
• Loan suitability
• Broker/client transparency

SalesKey will seek to be part of this consultation process and it is our view that further clarity and ultimately stricter enforcement will drive better outcomes for consumers and also for responsible and contemporary Finance Brokers and Lenders.

For those of you who already partner with us via one of our retained compliance support options, you are in a strong position. For those who are not, we’d welcome the opportunity to explain the value our programs provide to numerous brokers, lenders and aggregators across Australia.

In conclusion, knowledge is power so we recommend you review the consultation paper yourself.  You can access it via this link and we’d welcome you sharing your thoughts and questions with us.