The purpose of a Responsible Lending Policy is to describe your business approach to the consumer credit assessment process. In addition to ensuring the highest standards of care for clients, these procedures also assist your business in complying with:
- The National Consumer Credit Protection Act 2009 and associated Regulations; and
- ASIC Regulatory Guide RG209 (on responsible lending).
The process that must be applied to the credit assessment of a consumer is in three broad step
1. Make reasonable enquiries about the consumer's financial situation, requirements and objectives;
2. Take reasonable steps to verify their financial situation; and
3. Make a preliminary assessment, based on the first two steps, as to whether any credit contract we might suggest is "not unsuitable ".
Your Responsible Lending policy is one of the general conduct obligations for credit licensees. To ensure your compliance you need to test yourself against this policy regularly, document the results and take action to fix any areas of non-compliance.
QED CompliFast is an online compliance monitoring system that Australian credit licensees use to meet their NCCP compliance obligations. With different areas tested quarterly, QED CompliFast ensures adequate testing, documentation and recommended action plans for responsible lending obligations.
