The Finance Brokers Association of Australia (FBAA) today said the ASIC has released a new Report 330 which is the result of a review undertaken by ASIC on ACLs and their supervision and monitoring of ACRs.
Peter White, Chairman & National President and CEO of the FBAA said “ASIC had reviewed a select group of large ACLs whom at the time represented 51% of all ACRs at that time (note. that was based on there being approximately 6,000 ACLs and 24,000 ACRs as at 30/6/11 – based on latest estimated numbers this month there are now approximately just under 6,000 ACLs and between 26,000 -27,000 ACRs plus employees).
There are 8 (eight) formal recommendations from ASIC based on their findings and it is important for industry to understand their obligations in compliance with the law and undertaking best practise policies within their businesses.
Without going into finite detail here as the actual document will be available from ASICs website for everyone’s reading plus it will be held in the Educational Centre of the FBAA’s website Member’s Area for ease of reference by our members, but these areas cover the need to ensure your compliance and training documents are specifically tailored for your business and not just a copy and paste from the RGs etc, and to ensure their people undertake their ongoing education requirements / CPD hours. The FBAA’s online CPD Management Systems through MPID is state of the art technology and reporting, and free to our members – so we know our members’ management and recording risks in this area are mitigated.
There are highlights on record keeping with an emphasis on preliminary assessments and recommendations that the assessment be readily available together with all documents that formed that assessment – sounds like ‘best practise’ to me and ensures brokers meet their legal obligations and reduce any risk. It is also highlighted that even if you don’t wind up providing credit, ACLs need to keep records on each ACR so to be able to identify the volume of loans and other potential risks indicators (ie. loan type and product).
There are several recommendations for the conduct of ACL compliance reviews “where appropriate” which include shadow/mystery shopping, site visitations, direct follow up with the borrower, staff are properly qualified and resourced with no conflicts of interest (ie sales vrs credit), responsible lending obligations that go beyond just that of the lenders credit guidelines. There is also guidance on taking a “proactive” approach to compliance issues with ACRs and identifying and rectifying any hard or damage caused to a consumer arising from such issues.
So the outcome of this is the Regulator is further monitoring and reviewing the actions of ACLs and ACRs so to give greater guidance on what is expected under the law, and the impact it has on borrowers and meeting compliance responsibilities.
The full Report is publically available as noted before, and I commend all stakeholders to read it and take appropriate action if or where necessary – it is obvious that this report has been written with its recommendations as there has been issues that need addressing.
The FBAA continues to work closely with ASIC and Treasury (the industry stakeholder committee celebrated our 5th Anniversary last month with Treasury and the NCCP) so to ensure the voice of the industry practitioner / broker is heard from those who are.”
For Further Information Please Contact :-
Peter J White
Chairman of the Board of Directors, National President & CEO
Finance Brokers Association of Australia Ltd
(07) 3847 8119
FBAA National Office – First Floor, 386 Logan Road
Stones Corner QLD 4120