What responsible lending obligations and compliance requirements are required for Personal Loans?
Your responsible lending obligations under the National Consumer Credit Protection Act 2009 (NCCP) requires you to undertake three key steps:
- Make reasonable enquiries about the consumer’s personal and financial situation, requirements and objectives; and
- Take reasonable steps to verify the consumer’s financial situation; and
- Make a preliminary assessment about whether the credit contract is ‘not unsuitable’ for the consumer.
The NCCP Act applies to loans that are for domestic, personal or household use (i.e. not a business loan), this means that all compliance requirements that would apply to a consumer loan for a property also apply to a personal/car loans.
The level and type of enquiries you make for each client will vary depending upon the circumstances, including the client’s own answers to questions within the Needs Analysis. If, during the course of your analysis, you uncover matters that may impact a decision to provide credit to that particular client, you may need to make further enquiries to ensure that the product is not unsuitable.
What is credit assistance?
Defined in Section 8 of the Act, a person provides ‘credit assistance’ to a consumer if, by dealing directly or indirectly with a consumer in the course of, as part of, or incidentally to, a business carried on this jurisdiction by the person, the person:
- suggests and/or assists the consumer apply for a particular credit contract with a particular credit provider; or
- suggests and/or assists the consumer apply for an increase to the credit limit of a particular credit contract with a particular lender; or
- suggest that the consumer remain in a particular credit contract with a particular credit provider; or
- suggests and/or assists the consumer apply for a particular consumer lease with a particular lessor; or
- suggest that the consumer remain in a particular consumer lease with a particular lessor.
So, when selecting ‘Personal Loans’ as the Opportunity Type - the the Compliance Wizard box will appear in your second tool bar giving you access to the documents in sequential order.
Mercury does not currently hold any product information, interest rates, fees and charges or servicing calculators from our Personal Loan providers.
Until they arrive, the Preliminary Assessment and Credit Proposal Disclosure documents must be manually completed to match the loan facility being recommended/offered by the specific lender. The sections highlighted in red (missing fields) on these documents must be completed.
Note: The P/A & CPD documents are completed once you receive formal acknowledgement/confirmation from specific lender in relation to loan particulars - loan amount; fees to be charged; interest rate; loan repayment amount; loan term; etc. *Complete and have the CPD acknowledged/singed by client(s) at time of signing proposed credit contract.
We have also provided a generic paper based Fact Find - Needs Analysis document to help you capture information about the client’s personal and financial situation, analyse their needs and objectives for borrowing, together with a manual Serviceability Assessment can be located in the Documents section > General Documents > Loans-Compliance folder.
An authorised Credit Representative must adhere to the NCCP responsible lending obligations and compliance requirements by completing/providing the following:
- Credit Guide - as soon as you realise you will provide Credit Assistance
- Credit Quote - must be completed if you charge a fee for services (brokerage) and must be signed by the client
- Needs Analysis questionnaire
- Preliminary Assessment
- Credit Proposal Disclosure - signed/dated/acknowledged
- Broker Checklist & Declaration questionnaire
And as required, all supporting documentation must be obtained and uploaded.
As always please don't hesitate to contact the compliance team for any further assistance.