Comply with NCCP responsible lending obligations
Credit licensees must not enter into credit contracts unsuitable for the consumer.
Who must comply
ACL holders providing credit assistance or entering credit contracts with consumers.
What triggers it
Providing credit assistance or entering a consumer credit contract.
When due
Before entering or recommending the contract.
Evidence required
Pre-contractual assessment, supporting documents, file notes.
Max penalty
Civil penalties up to $15.65M / 3× benefit / 10% turnover; consumer remedies
Summary
Chapter 3 of the NCCP Act requires credit licensees to make reasonable enquiries and verification about the consumer's financial situation and objectives, and to assess whether the credit contract would be unsuitable. ASIC's RG 209 provides guidance. Note: 2020 reform proposal to repeal these obligations was abandoned in 2021 — they remain in force.
Enforced by
Source legislation
Industries
Topics
Source: https://asic.gov.au/regulatory-resources/credit/responsible-lending. Rules Mate is not a law firm. Always verify against the live regulator source before acting.