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 ASIC’s views on the responsible lending obligations, and steps you can take to minimise the risk of non-compliance with these obligations.
The responsible lending obligations involve:
- making reasonable inquiries about the consumer’s financial situation, and their requirements and objectives;
- taking reasonable steps to verify the consumer’s financial situation; and
- making 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.
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).
ASIC's public hearings on responsible lending
ASIC held public hearings on responsible lending in Sydney on 12 August 2019 and Melbourne on 19 August 2019.