Under responsible lending and Best Interests Duty obligations, you must understand each client’s needs and objectives for borrowing. However, we also need to ensure the correct compliance documents are completed for each loan.
Loan Scenarios: What NCCP compliance documents do you need?
= Document needed X = Document not needed
Pricing Requests
If you are submitting a pricing request for your clients with no changes to the existing loan product, there is no requirement to complete the NCCP documents.
Place a detailed note on the contact record to explain the transaction and confirm that you have verified with the client that they are not under financial hardship or have changes to their financial situation that could impact their ability to repay their loan.
You are required to obtain this confirmation from all borrowers.
If your clients confirm they may be in financial hardship please refer them to the Lender’s hardship team.
Non-regulated loan scenarios
NCCP Legislation does not require you to provide a Credit Guide for non-regulated loan scenarios. However, providing this to your customers is considered a best practice as it gives them important preliminary information about you and your services.
Increase in existing loans
If the client requests additional funding (new/increase in lending amount), then all compliance documentation (i.e. Credit Guide, Quote ‘if you charge a fee’, Needs Analysis, Preliminary Assessment, Summary of Requirements & Credit Disclosure must be completed. This is because your client's circumstances (financial and employment) may have changed since the original lending.
New Lending
Yes, all compliance documentation must be completed.
Refinancing
Yes, all compliance documentation must be completed.
So please remember, to adhere to your responsible lending and best Interests Duty obligations and always understand your client’s needs and objectives for credit assistance.