ob体育 has today issued a consultation paper to update its guidance on responsible lending (CP 309).
ob体育鈥檚 guidance has been in place since 2010 when the responsible lending laws were first introduced. Although the laws have not changed since 2010, ob体育 considers it timely to review and update the guidance in light of its regulatory and enforcement work since 2011, changes in technology, and the recent Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Our review of RG 209 will consider whether the guidance remains effective and identify changes and additions to the guidance that may help holders of an Australian credit licence to understand ob体育鈥檚 expectations for complying with the responsible lending obligations.
ob体育 welcomes submissions on the update of our guidance on responsible lending from any interested party. In the consultation paper we have asked a series of questions about specific matters. We are also keen to hear from stakeholders about any other issues considered important that are not dealt with in the consultation paper.
ob体育 is also considering whether to provide an opportunity for key stakeholders to speak to the Commission at public hearings in addition to making written submissions.
Further information about the consultation and its progress will be available on the ob体育 website.
鈥淭he responsible lending obligations are an integral part of the regulatory framework for all consumer loans鈥� said ob体育 Commissioner Sean Hughes. 鈥渙b体育 wants to ensure its guidance provides industry with certainty, including as a result of emerging technology and initiatives such as open banking and comprehensive credit reporting. We encourage everybody to participate in this extensive consultation process鈥�.
The consultation is open for a period of three months, with comments due by Monday 20 May 2019.
Background
Regulatory Guide 209 Credit licensing: Responsible lending conduct (RG 209) contains ob体育鈥檚 guidance on responsible lending for consumer credit. RG 209 was issued in 2010 and last revised in November 2014.
Since then there have been many matters that now mean it is timely for ob体育 to update its guidance.
- ob体育 regulatory and enforcement actions, including court decisions,
- ob体育 thematic reviews on various parts of the industry such as interest-only loans,
- the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry,
- Recent and upcoming initiatives such as comprehensive credit reporting and open banking, and聽
- Changes in technology.
ob体育 has also received anecdotal feedback that licensees may be applying the responsible lending obligations where the law does not require them to be applied (e.g. in small business lending). We are seeking feedback on whether there is a need to include some additional guidance in RG 209 which sets out particular examples where the law does not require responsible lending or related obligations to apply.