Responsible Lending Overview and Requirements
The responsible lending obligations in the NCCP Act require brokers to:
- act ethically, honestly, and fairly;
- make reasonable enquiries about the consumers' financial situation, and their requirements and objectives;
- take reasonable steps to verify the consumers' financial situation; and
- make a preliminary assessment about whether the credit is 'not unsuitable' for the consumer.
You must make the preliminary assessment within 90 days of when the loan is applied for.
Credit will be unsuitable, if at the time of the assessment it’s likely that:
- a consumer will be unable to comply with their financial obligations under the proposed credit contract, or could only comply with substantial hardship; or
- the proposed credit contract will not meet the consumer’s requirements or objectives.
Loan Market requires that you have accreditations with a minimum of 20 lenders, in order for you to be able to offer a range of products to your clients.
NCCP disclosure documents
You must provide your clients (or potential clients) with a Hello Pack that includes the Credit Guide. In addition, you must complete and provide a Game Plan that incorporates the client’s preliminary assessment, relevant quote and proposal information, and further responsible lending provisions including privacy consent and commission disclosure.
The Credit Guide provides the client with key information they need to know to make an informed and confident decision when engaging your services (and the services of Loan Market). You must provide the Credit Guide as soon as it becomes apparent that you’ll be providing credit assistance to the client.
The preliminary assessment is a ‘fact find’ that assists you in making reasonable enquiries about the client’s requirements, objectives and financial situation in making a decision on whether the financial product is ‘not unsuitable’ for them.
The Game Plan document provides information on the commissions we receive and the fees the client must pay if we assist in arranging finance. Current versions of the NCCP Act Documents are located on MyCRM.
- provide a Credit Guide as soon as it becomes apparent that you will be providing credit assistance;
- conduct a preliminary assessment of the client to identify their objectives and requirements;
- complete a serviceability assessment using the lender's calculator;
- verify the customer financial position for the serviceability calculation as per the supporting documents minimum requirements;
- provide the client with a copy of the Game Plan and obtain an executed (signed) copy from them;
- scan & upload Loan Market supporting documents minimum requirements into MyCRM prior to lodgement.