ASIC concerns prompt YBR licensing restructure

by AB29 Jul 2013

ASIC concerns have prompted Yellow Brick Road (YBR) to change the way it authorises companies and individuals to offer loan advice through branches operated under its Australian credit licence.

YBR has directly authorised more than 100 individuals working in its branches as credit representatives. However, ASIC says the national credit licensing framework also required YBR to authorise the companies which operate the branches because the companies also act as intermediaries between the licensee and the consumer.
The regulator says YBR has been cooperative in responding to the issue and says it’s important for all credit licensees to carefully consider how each party they deal with is authorised or licensed.

“This helps to ensure that all the parties involved in the loan application process are identified and also strengthens access to external dispute resolution,” reads an ASIC statement. “These are both important consumer protection aspects of the regime.”

YBR is now in the process of authorising the corporate entities directly under its licence and those entities can sub-authorise employees or they can be directly appointed under YBR’s credit licence.

At the moment, YBR operates over 150 branches through a network that assists consumers to apply for credit contracts.

The companies operating YBR branches do so under a branch agreement with the licensee and are an integral part of the provision of credit to consumers. They manage the overall provision of credit to consumers seeking a loan.