The Australian Securities and Investments Commission (ASIC) has estimated it will cost just over $9m to regulate the country’s credit intermediaries during the 2017-18 financial year.
The regulator released a report on Friday (6 October), Cost Recovery Implementation Statement: Levies for ASIC industry funding (2017–18), which examined the total budgeted costs for basic enforcement and what would need to be recovered from each industry sector.
The $9m in estimated costs for credit intermediaries consists of $2.7m for enforcement, $1.4m for property and corporate services, $1m for surveillance, $1m for IT support and a host of other, smaller costs.
ASIC reports that there are 4,861 credit intermediaries in Australia, including 36,149 credit representatives.
“In 2017-18, we will continue our work promoting responsible lending practices and appropriate responses to financial hardship in the credit industry. We will continue to focus on the risk of loan payment stress resulting from inappropriate lending and changing economic conditions, with a particular focus on non-lender gatekeepers and high-risk products (ie small amount credit contracts and consumer leases),” the regulator said.
This includes follow-up work with lenders regarding interest-only lending, a review of loan fraud in the Australian home loan market, and an investigation into responsible lending compliance arrangements for large finance brokers and lenders dealing heavily in interest-only loans.
ASIC did not release any new figures on exactly how much the levy would be for credit intermediaries instead repeating its earlier statements describing a minimum levy of $1,000 and a graduated levy that will be based on the number of authorised credit representatives the entity has at the end of the financial year.
Levies will be cumulative for firms which act in multiple roles as a credit provider, intermediary and small amount lender, ASIC said.
“If a credit licensee holds authorisations as a credit provider and a credit intermediary and provides both small amount credit contracts and regular loans, they are required to pay the levy applicable for all three subsectors. Each graduated levy is calculated separately and only relates to the licensee’s involvement in that activity or subsector.”
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