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Meeting new ASIC guidelines tough for brokers, says solicitor

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Australian Broker | 23 Apr 2015, 08:20 AM Agree 0
Brokers could face challenges meeting ASIC's updated responsible lending obligations after landmark civil case, says a solicitor
  • Chris C | 23 Apr 2015, 09:08 AM Agree 0
    Get over it guys: we are living in a 'blame' society now and of course pollies/lawyers are promoting it because it keeps the courts full and the income flowing - don't blame the borrower (they must have had their arm pulled up behind their back to make them sign for the money) blame the broker / lender and anyone else for it. Always nice to see others paying for someone else's mistakes and lifestyles eh ?
  • QEDRisk | 23 Apr 2015, 09:16 AM Agree 0
    The updated or "restated" RG209 did not represent anything new. It always said the same thing it's just that, since the Cash Store case, ASIC now feels empowered to state it's opinions in plainer English than before. If compliance is a burden, you're doing it wrong!!
  • Robert B | 23 Apr 2015, 09:33 AM Agree 0
    Predicting people's future spending habits is even harder than the Gov budget forecasts. Highly unreasonable. Surely with our education system, individuals should have some responsibility for their own lives?
  • SEQ Broker | 23 Apr 2015, 09:43 AM Agree 0
    Golly gee Batman. Does this then apply to ALL credit licensees. I mean, can you imagine any bank staffer asking the kinds of questions that us brokers do? or is this is witch hunt against brokers for the federal government to aid their pals, the big four. I ask, I keep a spread sheet but when it comes to lending for resi property, what client wouldn't simply tack a box saying that their living expenses can change (are of secondary importance) to buying a home. How often does: foxtel, internet. phone , the second car, the holiday, the wedding or Food, Clothes, education, insurance , travel costs go out the window (and not just on paper - in reality) for the client to be able to get into their own home. Conversely how ridiculous to put lenders in a position where they have to say, sorry mr and mrs jones but unless you choose to dump foxtel you cant buy a home.
  • Patrick | 23 Apr 2015, 10:00 AM Agree 0
    In reality, a place not frequented by regulators, the majority of people do not budget or keep a systematic record of their cost of living. Bills get paid and other discretionary expenditure is largely a series of ad hoc decisions.
  • Broker | 23 Apr 2015, 10:01 AM Agree 0
    Given that a good portion of actual living expenses are often discretionary and therefore variable, these guidelines are just another fine example of our nanny state stupidity that we all have to deal with these days.

    The benchmark living expense figures are reasonable estimate and further enquiry is not really necessary as this is just crystal ball gazing.

    I am not responsible for what my clients choose to spend throughout any given period into the future , as after all they are adults and are responsible for their own decisions

    All my files are NCCP compliant though...and my office uses a whole lot more paper, yet client satisfaction remains the same as pre NCCP.

  • Ian | 23 Apr 2015, 10:22 AM Agree 0
    This makes things a little more difficult but should not be a major problem so long as our competitors over the counter at the big 4 banks are dealt with by APRA if they don't also comply. That is a level playing field is essential.
  • QLD broker | 23 Apr 2015, 12:04 PM Agree 0
    How the hell are we supposed to verify a customers living expenses to the extent ASIC require? Do we have to live with the client for a month and write down everything they spend? This is ridiculous and overkill to the extreme. We are the ones at risk here and all we are trying to do is assist a client with finance.
  • MCC | 23 Apr 2015, 01:04 PM Agree 0
    Sorry I fail to see the problem. As part of the licencees duties & responsibilities under 209 we enquire as to the "living" needs & expenses of the borrowers. ASIC itself has a great "Money Smart" budget on excel spreadsheet readily available, which our practice encourages all our clients to utilize as part of the interviewing process - we then automatically uncover the clients current living needs. This is really not "rocket science" it?
  • wayne armstrong | 24 Apr 2015, 09:20 AM Agree 0
    Hi Guys
    If you do your job right and don't put people into loans they will struggle with it will never be a problem.....
    Don't Compare a mortgage Broker with a PAYDAY 300% lender
    ASIC are only trying to Back peddle and get in the media to save Face Over a Side of the finance Business that should have been Licenced First Followed By Private Lenders
    then Car dealers
    But the Mortgage Brokers Where Second to the planners
    Do the right Thing and You Will never have a problem
    Wayne MMA
  • Maria Rigoni | 25 Apr 2015, 12:01 PM Agree 0
    RG209 is nothing more than regulatory guidance. Payday loans were a problem before the NCCP and are still a problem after the NCCP. Our banking and monetary system need reform.
  • Maria Rigoni | 27 Apr 2015, 10:07 AM Agree 0
    RG209 is nothing more than regulatory guidance. Payday loans were a problem before the 'fix all dodgy broker' NCCP and are still a problem after the the NCCP . Our banking and monetary system needs reform so that the borrowing needs of the vulnerable are considered in a realistic manner. There are two sides to a coin. In loans the two sides are responsible borrowing and responsible lending.
  • ARIP | 27 Apr 2015, 01:39 PM Agree 0
    Guys, please don't blame all borrowers either...and I know that most of you aren't. The big banks manufactured the loans and stipulated what information was to be given back to the borrower and now the poor brokers are somehow getting the blame.
    The banks had policies which targeted Asset Rich Income Poor borrowers(ARIP's)- I know I was one of them and so were thousands of others like me. I have never blamed the broker, I know where the blame lies, the banks engineered the Control Frauds and you people are the Fall Guys! A Royal Commission with extensive Terms of Reference to look at the banks lending practices over many years would bring them back into line and show that you people were, for the most part, just pawns in their game.
  • Brigadier Ncube | 05 May 2015, 01:11 PM Agree 0
    It seems as though the broker has not fully done their job competently and they should be aware of the financial state that the borrower is in and they should determine the borrower's capacity and affordability to repay the loan.
    Retraining the brokers might the solution to the current problems that are happening.
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