The Finance Brokers Association of Australia (FBAA) says it supports ASIC’s recommendations for licensees to tighten their supervision and monitoring of credit reps.
Peter White, chairman and national resident and CEO of the FBAA, says ASIC had reviewed a select group of large ACLs whom at the time represented 51% of all ACRs.
There are eight formal recommendations from ASIC based on their findings and he says it’s important for industry to understand their obligations in compliance with the law and undertaking best practise policies within their businesses.
“[It] sounds like ‘best practise’ to me and ensures brokers meet their legal obligations and reduce any risk. It also highlighted that even if you don’t wind up providing credit, ACLs need to keep records on each ACR so as to be able to identify the volume of loans and other potential risks indicators.”
White says there are several recommendations for the conduct of ACL compliance reviews ‘where appropriate’, which include direct follow up with the borrower, ensuring that staff are properly qualified and resourced with no conflicts of interest and responsible lending obligations that go beyond just that of the lenders credit guidelines.
“There is also guidance on taking a “proactive” approach to compliance issues with ACRs and identifying and rectifying any hardship or damage caused to a consumer arising from such issues. So the outcome of this is 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.”