URGENT CREDIT ALERT From Credit Wise
28th October, 2010
As you know, ASIC has requested all licence applications be lodged by 10 December 2010, which is only 31 business days away.
For Brokers who are busy putting their NCCP licensing risk and compliance framework in place, you can access an overview of what's required on our website.
Once you've got all those elements together, you can have confidence in submitting your NCCP licence application and getting on with business.
NCCP Risk and Compliance Framework
At this stage, those who intend to apply for an Australian Credit Licence should have most of their risk and compliance framework in place, or well under development.
Before you apply for your licence, ensure you have the following in place:
The licensing risk & compliance framework – risk analysis and documented policies and procedures - covering
- Responsible lending – partial compliance commenced on 1 July 2010 for some
- Conflicts of Interest – compliance commenced on 1 July 2010
- Competency & compliance – compliance commenced on 1 July 2010
- Human, Technological & Resource Adequacy
- Dispute Resolution
- Compensation arrangements
- Verification of any business/person you deal with is registered / licensed / appointed as a credit representative or appropriately exempt
Responsible Managers – those influencing the day to day business operations
- Undertake due diligence to ensure they are not banned/disqualified etc,
- Obtain police and credit checks
- Check qualifications are at least Cert IV or in a relevant degree – otherwise arrange for enrolment in an appropriate professional qualification
- Collect CVs/resumes for upload in the licensing process
- Schedule Continuing Professional Development – 20 hrs per annum in credit related areas
Referrers Who Pass on Consumer Contact Details
- Undertake due diligence on referrers to ensure they are not banned, their businesses meet criteria, etc
- Develop a referrer register
- Appoint, train and monitor referrers
- Script the referral contact and disclosure processes
Credit Representatives
- Undertake due diligence on credit representatives to ensure they are EDR members, not banned, etc
- Check whether already appointed by another licensee as a credit representative and if so, consent of that licensee is to be obtained
- Obtain police and credit checks
- Notify ASIC of their appointment and termination within specified timeframe
- Develop a credit representative register
- Appoint and train credit representatives
- Establish sub-authorisation arrangements for employees of credit representatives
Representatives training
- Train everyone involved in the credit cycle in relevant credit related training – Privacy, NCCP, AML/CTF, Market Practices, Consumer Protection, etc
Responsible Lending documentation – current & 1 January 2011 additional obligations
- Credit assessment policies and procedure should either be in place now or prepared for use 1 Jan 11
- For credit providers, the credit guide must be ready for 1 Jan 11 – although Treasury has not yet finalised the requirements as yet
- For brokers, the credit guide, quote and proposal documents must be ready for 1 Jan 11 – although Treasury has not finalised the requirements as yet
Internal Dispute Resolution policies and procedures
- Must meet the relevant Australian Standards & ASIC requirements
- This should already be in place
Supervision/proactive monitoring programs decided
- Required to ensure all NCCP related policies and procedures are effective and complied with
Operational policies and procedures, in addition to the licensing obligations, should be documented
National Credit Code documents – should be updated and already in place
We urge you to finalise your compliance framework as quickly as possible as it is complex. Should you require assistance with the licensing framework, please consider our NCCP Licensing Risk and Compliance kit and supporting webinars.
It will help you understand your licensing obligations and provide customisable templates to demonstrate how you meet those obligations.
About CreditWise
CreditWise are recognised as the pre-eminnent law firm specialising in the National Consumer Credit Protection (NCCP) Act. They have been associated with consumer credit legislation since its inception and have been a member of Treasury's working group on the development of the NCCP Act.
CreditWise have develop this tool kit in conjunction with Intellitrain utilising their expensive knowledge of both the NCCP legislation in addition to the broking industry to provide the most up-to-date and comprehensive NCCP kit available in the market.
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