Use this guide to understand recent changes to mandatory document requirements and how you can apply a flexible approach to verifying each client’s financial situation while meeting your obligations under the National Consumer Credit Protection Act (NCCP).
Why this change matters
Collecting the right documents helps you meet responsible lending obligations. You must make reasonable enquiries into a client’s financial situation and take reasonable steps to verify it.
Previously, brokers were required to obtain three months of transaction account statements for every loan file. While useful for verifying salary credits, living expenses, dependants, and liabilities (including Buy Now, Pay Later accounts not shown on credit reports), this requirement is no longer mandatory.
You now have the flexibility to tailor your document collection approach to each client, using alternative verification methods when appropriate.
Important: You must still collect sufficient evidence to verify the client’s financial situation. The flexibility provided does not reduce your NCCP obligations.
What is flexible document collection?
Flexible document collection allows you to select documentation that best matches the client’s circumstances. Instead of relying solely on transaction account statements, you can choose from a range of alternative documents to confirm income, expenses, and liabilities.
This approach recognises that no two clients are the same, and you, as their broker, are best placed to determine which documents provide appropriate verification.
Choosing appropriate documentation
When selecting alternative documents, consider:
How each document verifies a key element of the client’s financial situation
Whether a combination of documents provides sufficient verification
Situations where a bank statement may still be the most appropriate option
Examples of alternative documents include:
Income verification: payslips, employment contracts, Australian Taxation Office (ATO) income statements
Expenses and liabilities: lender statements, Buy Now Pay Later summaries, rental ledgers
Other relevant financial records depending on the scenario
See alternative documentation options and scenarios for detailed options and scenarios.
Documenting your verification process
For every loan file, record:
The documents you collected
Why you selected those documents
How the documents satisfy your responsible lending verification requirements
This explanation should be clear enough for an auditor or assessor to understand your rationale at a glance.
Tip: Use consistent language in your file notes. For example:
"These documents provide sufficient evidence of income stability and confirm declared liabilities."
Need help?
If you need help applying flexible document collection or understanding your responsible lending obligations, contact your Compliance Support Manager or email [email protected]