COVID-19 information for lenders

The Australian Prudential Regulation Authority (APRA) announced an extension of its temporary capital treatment for bank loans on 8 July 2020. This means that lenders have the option of extending repayment deferrals for an additional four months for borrowers that require further assistance. An extension to a repayment deferral will not be automatic and lenders will be contacting borrowers to determine what are the best options for them given their circumstances.

ASIC is closely monitoring how lenders are assisting consumers who are experiencing financial difficulties due to COVID-19.

Lenders must also do all things necessary to ensure that the credit activities authorised by their licence are engaged in efficiently, honestly and fairly.

In April 2020, ASIC wrote to lenders about responsible lending, hardship and other matters.

In August 2020, ASIC issued its expectations of retail lenders when loan repayment deferrals end.

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.