Credit licence fee
You will be asked to calculate the total amount of credit you have advanced, been assigned or successfully referred to a credit provider and the amount of rent payable under consumer leases that you have entered into or successfully referred to lessors in the financial year before the application is made. You will need to add together:
the total amount of credit advanced by you in the financial year before the application is made;
the total amount of credit assigned to you in the financial year before the application is made (based on the face value of the credit, rather than the resale or purchased value of the credit);
the total value of credit in applications submitted by you to credit providers and intermediaries in the financial year before the application is made that have resulted in a loan being made;
the total amount of rent payable by consumers under consumer leases entered into by you in the financial year before the application is made; and
the total amount of rent payable by consumers under consumer leases submitted by you to lessors and intermediaries in the financial year before the application is made that have resulted in a consumer lease being entered into.
For more information on what amounts you need to take into account when you make your calculation, see RG 204.52–RG 204.55.
You will then need to:
select from the list in the online application the appropriate range that covers the total sum that you have calculated; and
indicate whether you are a ‘sole trader’.
For more information on the ranges that you will be asked to select from, the meaning of ‘sole trader’ and the effect that this will have on the application fee, see RG 204.56–RG 204.57.
Will I be an ‘original credit provider’ or ‘act as an intermediary’?
If you selected the authorisations to either ‘Engage in credit activities as a credit provider or lessor’ or ‘Engage in all credit activities’, you will be asked whether you intend to provide credit as an ‘original credit provider’.
You are an original credit provider if you are the person who provides credit under a credit contract and who is the initial holder of rights under the credit contract (i.e. you have not become a credit provider because you have been assigned rights under the credit contract).
If you selected the authorisations to either ‘Engage in credit activities other than as a credit provider or lessor’ or ‘Engage in all credit activities’, you will be asked whether you intend to ‘act as an intermediary’ between a credit provider and a consumer for the purpose of securing credit for the consumer.
You will ‘act as an intermediary’ if you are a person who takes part in the process of securing the provision of credit for a consumer under a credit contract or consumer lease by preparing or passing on information as the result of a request from the consumer or another intermediary. You may be an intermediary even if you do not have face-to-face contact with the consumer. Innovations in credit product design mean that a consumer’s credit application may pass through a number of hands between the first person they deal with and the credit provider, and the roles and functions of all of these different people may be uncertain. The definition of ‘acts as an intermediary’ is intended to cover all of these people.
For example, you will be acting as an intermediary if you are:
- an aggregator that acts as a conduit between an individual broker and a credit provider; or
- a mortgage manager that is involved in arranging a credit contract (in addition to managing the credit contract once it has been provided).
For more information on what is meant by acting as an intermediary, see RG 203.
If you answer ‘yes’ to either of these questions, you will be asked to indicate:
- your intended distribution model (e.g. whether you will use employee sales representatives, third-party sales representatives (including franchisees) or related companies);
- how you will most often receive, or arrange, credit applications (e.g. over the counter, home visits, telephone, mail, internet);
- whether you intend to cross-sell financial products, other than credit contracts or consumer leases, to your client base, or refer your clients tothe issuers of other financial products (e.g. you may sell insurance products to your clients); and
- if you do cross-sell, whether you will receive commissions or other payments.
Numbers of representatives
You will be asked how many representatives you have, or intend to have from the start of your licence, who will engage in credit activities.
‘Representatives’ includes your employees and directors, employees and directors of related bodies corporate and credit representatives.
In many businesses, there will be representatives who do not engage in credit activities (e.g. a receptionist may be an employee of a business that engages in credit activities, but they may not themselves engage in credit activities).
To answer this question, you will need to select, from the range provided, the number of representatives engaging in credit activities that you reasonably expect to have when you start to engage in credit activities (if the licence is granted).
If you have part-time representatives (e.g. they are part-time employees), they should be counted as an appropriate fraction of a full-time representative.
Estimated numbers of credit representatives
You will be asked how many credit representatives you expect to authorise in the first 12 months of operation under your credit licence (if it is granted).
‘Credit representatives’ are people who are authorised under s64 or 65 of the National Credit Act to engage in credit activities on your behalf.
If you indicate that you expect to have one or more credit representatives, you will also be asked where they will be located (i.e. particular states or territories, Australia-wide or overseas).
Your answer to this question will also trigger a later question about your processes for ensuring that these people are members of an approved external dispute resolution (EDR) scheme.
Money held in trust
You will be asked whether you are likely to receive money for or on behalf of another person in the course of providing credit services. If you select ‘yes’, you will be asked whether you will hold this money in a trust account with an Australian ADI.
Credit licensees that receive money for or on behalf of another person in the course of providing credit services have obligations under Div 3 of Pts 2–5 of the National Credit Act to maintain a trust account.
This question requires an indication of whether you expect to receive and hold money for consumers. Not all people who have an authorisation covering credit services will do this.
Credit providers who also select the authorisation to ‘Engage in all credit activities’ may provide credit services, other than in their capacity as a credit provider, for the purpose of this question and the trust account obligations.
Note: For more information about whether the trust account obligations apply to you, see Information Sheet 136 Complying with your trust account obligations as a credit licensee (INFO 136).
This information comes from Regulatory Guide 204.