ASIC chair James Shipton reiterated the regulator’s aggressive approach to enforcement and shared the body’s key strategic priorities for the upcoming year, at a speech in Melbourne yesterday.
ASIC plans to update its responsible lending guidelines for the first time in nearly ten years.
Shipton linked the decision not only to providing improved clarity and consistency to lenders and mortgage brokers, but also to the decline in house prices and fall in consumers seeking financing.
“Through any economic cycle, responsible provision of credit is critical to the long-term sustainability of the economy as well as being a cornerstone consumer protection. This is why…are consulting to update our expectations on them,” he explained.
As part of the process, select banks will undergo public hearings to detail their lending practices and help “robustly test” the industry submissions that arise during the period of consultation.
Shipton also confirmed that ASIC is committed to doing all it can to ensure that vulnerable consumers are treated fairly and financial services providers are kept accountable.
New enforcement strategy
Shipton did not mince words on this topic, reiterating that the regulator plans to “use the full extent of its new penalties and powers through the discipline of ‘Why Not Litigate?’”
While he did note that some in the industry have been misreading the recent doubling down on enforcement, he confirmed that ASIC’s “core focus [remains] on deterrence, public denunciation and punishment of wrongdoing by way of litigation.”
The introduction of new regulatory tools is part of the ramp up. Shipton named the recently proposed product intervention powers as an example. The measure, open for consultation from the last week of June into August, allows ASIC to take “proactive action” and intervene when financial or credit products are likely to result in “significant consumer detriment.”
Shipton said that ASIC and APRA are striving to “formalise and enhance” their information sharing arrangement, as well as to generate an updated document that better reflects their “closer working relationship.”
Additionally, ASIC has reported working more closely with AFCA, AUSTRAC, the New Zealand Financial Markets Authority and other regulators both domestically and abroad.