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June 1, 2011

ASIC’s credit relief decisions

The latest ASIC report on relief decisions gives an indication of the way ASIC approaches relief applications.

It sets out its refusals to grant relief from:

  • the requirement to hold a credit licence to a lenders’ mortgage insurer, in relation to its recovery activities arising from its lenders’ mortgage insurance (LMI) business.
  • the requirement to hold a credit licence to a service provider of the mortgage industry. The services being provided were typical ‘back office’ activities, under an outsourcing arrangement, with limited customer contact, and no discretion to change information or content.
  • compensation arrangements required in order to progress a credit licence application
  • the requirements for exemption as an entity from being deemed a ‘prescribed unlicensed carried over instrument lender’
  • a request to take a no-action position to allow a legal practice to refer clients to a particular credit provider

ASIC discloses that it took a no action position in relation to an entity that engaged in credit activities while unregistered or unlicensed by referring consumers seeking insurance premium funding to a premium funder via its website.

ASIC granted

  • conditional relief to exempt seven life insurance companies from the responsible lending requirements of the National Credit Act for loans on policies provided to life insurance policy holders.
  • an exclusion under s6(14) of the National Credit Code to premium funders so that premium funding loans that meet certain restrictions are not a provision of credit to which the National Credit Code applies.
  • relief to modify s67 of the National Credit Act to reinstate the authorisation of credit representatives, where authorisation had lapsed due to the operation of reg 25A of the National Consumer Credit Protection Regulations 2010 (National Credit Regulations).

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Posted 1st June 2011 by admin in Uncategorized

December 28, 2010

Archived Posts Sitemap: National Consumer Credit

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Posted 28th December 2010 by David Jacobson in Uncategorized

September 26, 2010

Is your hardship response up to date?

The Consumer Law Action Centre says it has made a formal complaint to the Australian Securities and Investments Commission about Westpac’s debt collection procedures for customers in financial hardship.

Whilst not disagreeing with a decision by Westpac to reject a request for temporary relief from a borrower in longer-term hardship it has raised the following concerns with Westpac's response:

  • Westpac threatened enforcement action, despite acknowledging that the borrower is in no position to do so, either now or in the foreseeable future;
  • the bank’s letter appeared to be based on a template that Westpac used for all its customers yet contained outdated and incorrect information about the options available to the client since the National Credit Act came into effect on 1 July;
  • The letter is signed off by Westpac’s hardship team but it actually came from its Collections Department.

[See Section 72 National Credit Code and Form 12 Regulations].

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Posted 26th September 2010 by David Jacobson in Uncategorized

September 12, 2010

ASIC update on credit regulation

The ASIC Chair's speech on 3 September contained an important update on ASIC's regulation of credit and its future plans.

Over the next 12 months ASIC will be:

  • "policing the boundary to ensure people aren’t operating outside the licensing system, either intentionally or inadvertently;
  • undertaking verification surveillances to make sure the information in licence applications is accurate;
  • reviewing practices at the fringe of the market to ensure compliance with the new responsible lending obligations when they come into force;
  • working with industry on the application of responsible lending obligations to credit card applications and credit card limit increases;
  • undertaking risk-based compliance reviews of credit businesses; and
  • finalising guidance on mortgage early exit fees and working with industry to ensure compliance."

Over 14,700 credit businesses have registered with ASIC and it has already issued 132 licences, with over 400 credit licence applications received.

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Posted 12th September 2010 by David Jacobson in Uncategorized