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Debt management licensing regime has commenced
From 1 July 2021, providers of debt management services (including firms offering ‘debt negotiation’ or ‘credit repair’ services) are regulated under the National Consumer Credit Protection Act 2009 (National Credit Act).
This means providers of these services must:
hold a credit licence with an authorisation that covers those services (or act as a representative of such an authorised licensee); or
be operating in accordance with the transitional arrangements, specifically that by 30 June 2021 they:
applied to ASIC for a credit licence or variation that covers this activity (or have arrangements to act as a representative of a provider that has applied for a licence to cover this activity); and
ARCA, ABA review Codes
The treatment of joint accounts and the sensitive topic of financial abuse feature in an overhaul of the Credit Reporting Code.
The Australian Retail Credit Association yesterday published proposed changes to the Code and is now undertaking public consultation.
The Australian Banking Association this morning also announced it has commissioned an independent review of the Banking Code of Practice and the review is now calling for submissions.
The National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Act 2021 was passed in February 2021 and provided for a new form of ‘financial hardship information’ to be included in the credit reporting system from 1 July 2022.
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Firms offering debt management services require credit licence to operate
ASIC has today released an information sheet for providers of debt management services that explains their new regulatory obligations, including the requirement to be licensed.
The National Consumer Credit Protection Amendment (Debt Management Services) Regulations 2021 (Regulations), made on 29 April 2021, prescribe certain debt management services as a ‘credit activity’ for the purposes of the National Consumer Credit Protection Act 2009 (National Credit Act).
Under the Regulations, a ‘debt management service’ broadly covers services such as ‘credit repair’ and ‘debt negotiation’ that are carried out in relation to a consumer credit contract and where a consumer is required to pay.
Mortgage Business
RLO changes could boost turnaround times: Westpac By Malavika Santhebennur 16 April 2021
The major bank’s CEO has reiterated that responsible lending changes could simplify the lender’s processes and improve mortgage approval times.
Westpac CEO Peter King appeared before the economics standing committee hearing during their ongoing Review of the Four Major Banks and other Financial Institutions on Thursday (15 April), where he was asked what impact the changes to the responsible lending obligations (RLO) would have on Westpac’s customers, including potential future customers.
The National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 focuses on amending the credit laws so that they remove RLOs and extend the best interests duty to more credit assistance providers, among o