policy matters
National Monday Update Issue:
National Credit code: ACPET to seek an application for relief of licensing requirement
ACPET Members who provide ‘credit’; engage in ‘credit activities’; enter into ‘credit contracts’; charge for the provision of ‘credit’, will need to register for an Australian Credit Licence.
ACPET has been in contact with ASIC in order to determine whether the intention of Australian Credit Licence was intended to apply RTOs who provide discounted fees for upfront payments. You can view ACPET correspondence with ASIC here.
In response to correspondence from ASIC, ACPET will seek an application for relief of licensing requirements which will cover all Members.
However ACPET will need to provide ASIC with examples of contracts in which Members charge a lower fee for a qualification paid upfront when compared to fees charged using a payment plan for the same qualification. Members who fit into this category are encouraged to contact Ben Vivekanandan by ben [dot] vivekananda [at] acpet [dot] edu [dot] au (email) or phone (03 9412 5912) to further discuss.
Detailed information follows.
Registration of Credit provider
Lenders, brokers and intermediaries dealing in consumer credit must register for an Australian Credit Licence, a key new requirement under the new National Consumer Credit Protection Act (National Credit Act).
Registration is the first step in complying with the new licensing obligations under the National Credit Act. The legislation establishes a national licensing regime to require providers of consumer credit and brokers and intermediaries to obtain a licence from ASIC.
ASIC has developed a number of support tools to assist industry in complying with their new obligations:
- Regulatory Guide 202: Credit registration and transition (RG 202) - updated to take into account regulations made since the guide was released in December 2009.
- Infosheets and other regulatory guides that take people through each requirement step-by-step.
- A call centre for applicants to talk to trained staff: 1300 300 630
- A support team who are experts in using ASIC's online portals and can assist with technical enquiries. online [at] asic [dot] gov [dot] au (Click here) to email them.
- A recording of ASIC's National Credit Roadshow online: www.asic.gov.au/credit
There are no fees for registration. The process is an online facility, it automatically pre-fills data where possible and is programmed not to repeat questions already asked of applicants who hold an AFS Licence. APRA-regulated applicants will also not be required to complete certain parts of the licence application.
When people apply for registration, they need to show that they can meet certain requirements that will apply to them as credit licensees. Membership of an external dispute resolution body is required; background checks will be needed so that certain statements about the past conduct of directors, company secretaries, partners or trustees involved in a business can be provided, and updates to existing entries on other ASIC registers should also be made.
Background
Historically, regulation of consumer credit has been the province of the States and Territories. This has resulted in a substantial body of similar but different legislation and has placed a significant administrative burden on credit providers operating across borders.
Accordingly, in 2008 the Council of Australian Governments’ (COAG) agreed to transfer responsibility for regulation of consumer credit, and a related cluster of additional financial services, to the Commonwealth.
Under the new Commonwealth legislation, which takes effect from 1 July this year and for the most part replicates the pre-existing State legislation but with new administrative and licensing arrangements, credit providers are required to be registered with ASIC and are required to comply with quite complex administrative obligations.