ASIC cancels mortgage broker licences over AFCA breaches

ASIC has taken decisive action against four Australian mortgage brokers for failing to maintain membership with the Australian Financial Complaints Authority (AFCA). Between 25 July and 29 August 2025, three credit licences were cancelled and one was suspended.

The affected companies are:

• APL Lending – licence suspended on Aug. 4
• Crown Home Loans & Finance – licence cancelled on Aug. 29
• Mortgage Origination– licence cancelled on July 25
• Po Hsiung Chai – licence cancelled on Aug. 13

AFCA membership: A legal requirement

Australian credit licensees are legally required to be members of AFCA. This membership ensures that consumers have access to “a free, fair, and independent dispute resolution scheme if a complaint cannot be resolved internally by a licensee.”

Under section 55 of the National Consumer Credit Protection Act 2009 (Credit Act), ASIC can cancel a credit licence if the holder breaches general conduct obligations under section 47, including the obligation to be a member of AFCA and to comply with credit legislation.

AFCA membership is mandatory for all credit licensees under Australian law. Non-compliance can result in immediate regulatory action, including licence suspension or cancellation.

How ASIC and AFCA work together

AFCA collaborates closely with ASIC to identify credit licence holders who do not maintain their required membership. 

“If an entity is expelled from the scheme or requests to withdraw membership, AFCA must notify ASIC,” the corporate regulator said in a statement.

This partnership is crucial for maintaining industry standards and protecting consumers.

ASIC regularly monitors AFCA membership status and acts quickly when obligations are not met.

Reasons for regulatory action

ASIC’s actions were prompted by several breaches, including:

• Failing to be a member of AFCA
• Failing to lodge annual compliance certificates on time (as required under section 53(1) of the Credit Act, which is defined as credit legislation in section 5 of the Act)
• Failing to pay industry funding levies owed to ASIC (ASIC may cancel a credit licence if levies and late payment penalties have not been paid in full within 12 months after the due date, under section 54(1)(d) of the Credit Act)
• Ceasing to engage in credit activities

These requirements are designed to ensure licensees operate transparently and remain accountable to both regulators and consumers.

Right to appeal

The impacted licensees “have the right to appeal to the Administrative Review Tribunal for a review of ASIC’s decision.” ASIC has made it clear that it “will continue to take action to cancel AFS licence or credit licences” where entities fail to comply with their obligations.

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