A significant portion of mortgage repayment deferrals will be expiring over coming months. As such, ASIC has outlined its expectations of lenders on processes to deliver appropriate and fair outcomes to consumers.

These add to our earlier expectations published on 29 April 2020.

Lenders must do all things necessary to ensure that the credit activities authorised by their licence are engaged in efficiently, honestly and fairly. As such, we expect lenders to have processes in place that allow for an orderly transition and importantly, deliver appropriate outcomes to consumers.

ASIC's expectations cover:

• contacting consumers about the expiry of their deferral
• what to do if a consumer cannot resume repayments on their mortgage.

In the same document we respond to questions from lenders we have met with, including authorised deposit-taking institutions (ADIs) and non-ADIs. Questions include:

• Are we doing enough to help consumers make informed decisions?
• How do we approach situations where a consumer’s financial hardship is so severe that they will not be able to repay their loan over the longer-term?

ASIC encourages all lenders to continue to work closely with consumers to not only provide relief, but to do so in a way that is sustainable and can assist consumers over the longer-term.

ASIC and APRA: expectations of ADIs

ASIC is working closely with APRA to ensure that our expectations of ADIs and how they are handling loans impacted by COVID-19 are aligned.

ASIC’s primary focus is on ensuring fair outcomes for borrowers, while APRA’s primary focus is ensuring prudently safe and sound practices. In pursuing our respective mandates, ASIC and APRA share a common goal to provide clarity of regulatory expectation so that ADIs can easily engage with their borrowers both prudently and fairly for the benefit of the broader economy.

ASIC and APRA will continue to coordinate the monitoring of loans impacted by COVID-19, engaging with banks and sharing data and information.