29 April 2020
Lenders have written to ASIC seeking guidance on a number of matters around regulation of lending during the COVID-19 pandemic.
ASIC has responded to provide clarity on issues of hardship, responsible lending and communication.
ASIC encourages lenders to continue to work closely with their customers to develop options that provide both short-term assistance to customers experiencing difficulty due to COVID-19 and also longer-term viability post COVID-19.
Responsible lending obligations apply to new lending (i.e. new loans or an increase to a credit limit on an existing loan). These obligations do not apply, and should not be considered by lenders as a barrier to, making appropriate changes to the terms of existing loans in response to hardship situations.
Read:
- Australian Banking Association letter to ASIC (PDF 234KB)
- ASIC response to Australian Banking Association (PDF 115KB)
Note: On 25 September 2020, the Government announced proposed reforms to the responsible lending obligations contained in Chapter 3 of the National Consumer Credit Protection Act 2009. The proposed reforms will amend the obligations that apply before entry into a credit product or the provision of credit assistance. ASIC’s guidance relating to the current responsible lending obligations will be reviewed and updated when the proposed reforms are finalised.