New law aims to put clamp on mortgage exit fees
The new consumer credit law in place from Thursday will give the Securities Commission will be given teeth to declare void so-called "unfair" or "unconscionable" exit fees that do not relate to the costs banks actually incur in closing accounts.
ASIC updates credit licence guidance
International Business Times AU
The body responsible for overseeing the new consumer credit protection regime has issued updated guidance for credit licensees.
ASIC has re-released six guides, primarily to incorporate references to several pieces of legislation that have been made since the guidance was originally published last December.
ASIC is at pains to point out that the revised guides refer to particular regulations affecting lenders with carried over (COI) instruments: namely, a contract that was made, and was in force immediately before 1 July 2010 and subject to the old Credit Code (the Uniform Consumer Credit Code). The guidance relating to responsible lending conduct has also been amended, so that its refers to recent regulations that extend the amount of time available to assignees of credit contracts to provide the original assessment of whether the credit is 'not unsuitable' when requested by the borrower.
However, ASIC maintains that changes made to the regulatory guides 'do not represent substantive changes to ASIC’s current policies and approach to administering the new National Consumer Credit regime'.
The guides that have been updated are:
- Regulatory Guide 202 - Credit registration and transition
- Regulatory Guide 205 - Credit licensing: General conduct obligations
- Regulatory Guide 206 - Credit licensing: Competence and training
- Regulatory Guide 207 - Credit licensing: Financial requirements
- Regulatory Guide 208 - How ASIC charges fees for credit relief applications
- Regulatory Guide 209 - Credit licensing: Responsible lending conduct
ASIC has also re-released Pro Forma 224 (Australian credit licence conditions) which updates information first released on 8 June. This has been amended to align the standard licence conditions with the experience, training and continuing professional development requirements for responsible managers of mortgage brokers set out in Regulatory Guide 206, and the minimum requirements for adequate professional indemnity insurance set out in Regulatory Guide 210.