Responsible lending obligations apply to any consumer loan provided for personal, household or domestic purposes.
For example, if a client is purchasing a vehicle for personal use, the National Consumer Credit Protection Act 2009 (Cth) (NCCP) applies.
When NCCP obligations apply
If the loan is for personal, household or domestic purposes, you must comply with:
Responsible lending obligations
Disclosure requirements
Unsuitability assessment requirements
The same core compliance obligations that apply to home loans also apply to consumer Asset Finance lending.
Required compliance documents
For consumer Asset Finance deals, you must complete all relevant compliance documents, including:
Credit Guide
Quote
Needs Analysis
Preliminary Assessment
Summary of Requirements and Credit Proposal
You must also:
Collect supporting documentation
Make reasonable enquiries about the client’s requirements and objectives
Verify the client’s financial information
Ensure the loan is not unsuitable
Making reasonable enquiries
The level and type of enquiries will vary depending on the client’s circumstances.
You must consider:
The client’s responses in the enhanced Needs Analysis questionnaire
Any risk indicators identified during discussions
Information that may impact the client’s ability to meet repayments
If issues arise during your assessment, you may need to make further enquiries to ensure the product is not unsuitable.
Consumer leases and credit assistance
Under section 8 of the NCCP Act, you provide credit assistance if you:
Suggest or assist a consumer to apply for a particular consumer lease with a specific lessor; or
Suggest the consumer remain in a particular consumer lease with a specific lessor.
These activities trigger responsible lending obligations.
Using Asset Finance in Mercury Nexus
When creating a new Opportunity in Mercury:
Select Asset Finance as the Opportunity Type.
The Compliance Wizard will appear.
Follow the tailored compliance document sequence provided.
Accessing Asset Finance records
To access Asset Finance Opportunities:
Open the CRM app.
Select Opportunities.
Choose Asset Finance from the Opportunity Type filter.
Compliance documents are available within the Opportunity under the Compliance tab.
Best practice reminders
Treat consumer Asset Finance deals with the same diligence as home loans.
Ensure all compliance documents are completed before submission.
Verify income and liabilities thoroughly.
Document your enquiries and reasoning clearly.
Important
Failure to meet responsible lending obligations can result in regulatory action and potential loss of accreditation.
Need help?
If you need help with Asset Finance compliance requirements, contact your Partnership Manager or email [email protected].