Responsible lending

Credit licensees must comply with the responsible lending conduct obligations in Ch 3 of the National Consumer Credit Protection Act 2009 

The key concept is that credit licensees must not enter into a credit contract with a consumer, suggest a credit contract to a consumer or assist a consumer to apply for a credit contract if the credit contract is unsuitable for the consumer.

As a credit licensee, you must decide how you will meet the responsible lending obligations.

RG 209 sets out our expectations for compliance.

Meeting your responsible lending obligations will require taking three steps:

  1. make reasonable inquiries about the consumer’s financial situation, and their requirements and objectives;
  2. take reasonable steps to verify the consumer’s financial situation; and
  3. make a preliminary assessment (if you are providing credit assistance) or final assessment (if you are the credit provider) about whether the credit contract is ‘not unsuitable’ for the consumer (based on the inquiries and information obtained in the first two steps).

In addition, if the consumer requests it, you must be able to provide them with a written copy of the preliminary assessment or final assessment (as relevant).

 

Find out more

Download Regulatory Guide 209, Credit licensing: Responsible lending conduct (RG 209)

Responsible lending disclosure obligations (INFO 146)

Using ASIC’s reverse mortgage calculator (to meet your responsible lending obligations for reverse mortgages) (INFO 185)

What's new

Lenders commit to improve credit card practices following ASIC review

ASIC has released Report 604  Credit card lending in Australia – an update, which sets out the changes being made by lenders to help consumers with credit card debt. 18-381MR. 18 December

ASIC puts spotlight on the rapidly growing buy now pay later industry

ASIC has released its first review of the rapidly growing buy now pay later industry. 18-357MR. 28 November

Firms must notify ASIC of their AFCA membership by end of November before late fees apply

Financial firms who are members of the Australian Financial Complaints Authority must notify ASIC of their AFCA membership by Friday 30 November 2018. 18-358MR. 28 November 

ASIC’s recent initiatives to strengthen underwriting standards

A speech by ASIC Commissioner, Cathie Armour. 27 November.

More credit releases

Last updated: 02/09/2013 12:00