COSL vows to 'get tough' on compliance

by Adam Smith12 Dec 2011

COSL has issued a position statement on responsible lending, claiming it will “get tough” on NCCP compliance among its members.

The EDR scheme has provided guidance on how it will deal with members who contravene responsible lending laws. Ombudsman Raj Venga said the guide would prove useful to COSL members and consumers.

“Our position statement is the most comprehensive statement on responsible lending issued by a non-government body. It will assist lenders and brokers with their new obligations and provide them with some practical guidance as to how they will need to conduct themselves when providing or arranging loans under the new laws. It will also provide consumers and their advocates with a useful understanding of how we will deal with a claim of irresponsible lending,” Venga said.

Under its position statement, COSL has claimed the power to take action on non-compliant members when consumer complaints are brought against them. The EDR said it could require its members to waive or refund fees of lenders and brokers, vary repayment terms or even entirely release borrowers from credit contracts it deems unsuitable.

“These are not mutually exclusive remedies and COSL may combine them so as to produce an outcome having regard to “fairness in all the circumstances.” For example, upon a finding of irresponsible lending, COSL may determine that the consumer repay the principal amount owing under the credit contract by regular payments over time, in such amounts which would not cause hardship and that the credit provider waive any fees and charges in part or, if fairness requires, in whole. If a credit assistance provider had assisted the consumer into the unsuitable contract and the amount financed included any fee paid to the credit assistance provider, then the amount to be repaid, could be reduced by the amount of that fee in part or in whole,” the guide said.

EDRs have come under scrutiny, with ASIC vowing to review the power granted to them under the NCCP, but Venga argued that COSL was “completely impartial” in its investigations.

COMMENTS

  • by ozboy 12/12/2011 10:08:34 AM

    Mmm this will be interesting, no laws in place to confirm NCCP but COSL thinks it is above the law. If ASIC's attention wasn't raised before it should be now.

  • by Country Broker 12/12/2011 11:50:36 AM

    Very Interesting Position to have by COSL if the reports are correct! I thought ASIC were in charge of Compliance and ENFORCMENT !! COSL are have a role in disputes and claims which could not be resolved internally be members of COSL , is it reasonable to assume that COSL would refer breaches they discovered in the course of their work to ASIC? Is this a power play? or are COSL saying "we can do a compliance better than ASIC"?

  • by Lynne Cox 12/12/2011 11:59:28 AM

    Ultimate Power ULTIMATELY CORRUPTS!!!!