Australian Credit Licence (ACL)
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Changes in the Credit Industry
The Commonwealth Government has introduced a national licensing regime requiring new licensing and on-going compliance requirements. The licensing regime will be ASIC regulated and will be very similar to the current financial services regime.
A person or entity who engages in credit activities, such as credit providers or lenders, credit service providers, brokers or intermediaries in a credit/loan transaction will be required to hold an Australian Credit Licence (ACL). Additionally there will be specific responsible lending requirements to adhere to when recommending a loan be taken out with a credit provider. The requirements introduce disclosure to consumers about the application and assessment process and prohibit credit providers from making loans which are unsuitable for borrowers.
KEY DATES
ASIC has released Regulatory Guide 202 Credit registration and transition. This explains the key dates to keep in mind when applying for an Australian Credit Licence (ACL). This is briefly outlined below:
1 April 2010 - 18 June 2010:
Registration applications must be lodged with ASIC in order to continue to operate after 1 July 2010.
If a current credit provider or credit service provider does not register within the above time, it must apply for an ACL after 1
July 2010 and will not be allowed to provide a credit service until it is granted an ACL.
New credit providers or credit service providers from 1 July 2010 will have to apply for an ACL and will not be permitted to
provide credit services until their ACL is issued by ASIC.
1 July 2010 - 31 December 2010:
Registered persons have 6 months to apply for an Australian Credit Licence (ACL).
The responsible lending requirement not to arrange or provide credit that is unsuitable will apply from 1 July 2010 for
brokers.
1 January 2011:
Responsible lending obligations for authorized deposit-taking institutions (ADIs) and Registered Finance Companies
(RFCs) come into effect.
The other Responsible lending obligations for brokers (including disclosure requirements) commence.
30 June 2011:
Registered persons may no longer operate unless an ACL has been obtained.
Considerations
It is important that those who will be caught to consider whether they will operate under their own ACL or seek to be a credit representative of someone who will get an ACL. If you intend to get your own ACL then it is important to register with ASIC by 18 June 2010.
If you do not intend to get your own ACL and wish to be appointed as a credit representative of someone who will get an ACL, it is important that you ensure that those arrangements are in place by 18 June 2010.
In any case, you should be aware of the new Responsible Lending obligations and ensure that your documents and processes are updated to be effective from the above dates.
Registration & Application Service
Acomplì has expert knowledge and experience in Financial Services licensing and compliance requirements. We will be offering services and assistance in registration and Australian Credit Licence applications. Additionally we will provide assistance to comply with the new Responsible Lending obligations.
Updates
Acompli will continue to provide updates as the further detailed developments in this area. If you would like to receive these free e-bulletins please register here. Information sessions are planned to provide you with information on the licensing process & the responsible lending obligations and we will send you an invite when the time and date has been finalised.