ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia)
ASIC Regulatory Guide 209 (December 2019), the regulator's guidance on the responsible lending obligations of the National Consumer Credit Protection Act: how licensees scale their inquiries into a consumer's requirements, objectives and financial situation, verify income and expenses, use benchmarks such as the Household Expenditure Measure only as a check, respond to red flags, divide responsibility between lenders and brokers, assess whether a product is unsuitable because the consumer cannot repay without substantial hardship or because it does not meet their objectives, apply the credit card, small amount credit contract and reverse mortgage presumptions, handle refinancing and switching, give the written assessment on request, and keep records that show the obligations were met.
ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia) is a compliance framework from Australia with 3 domains and 14 controls. The largest domains are Section B: making reasonable inquiries and verifications – ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia) (8 controls), Section C: assessing whether a credit product is not unsuitable – ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia) (4 controls), Section D: the written assessment and record keeping – ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia) (2 controls). Every control below carries what it requires and what an assessor expects to see.
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Framework Domains (3)
Section B: making reasonable inquiries and verifications – ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia)
| Code | Title |
|---|---|
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-b-additional-sacc-reverse-mortgage | For small amount credit contracts obtain and consider ninety days of account statements and check the presumptions; for reverse mortgages give the equity projections and make the additional inquiries |
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-b-financial-situation-income-expenses | Inquire into the consumer's financial situation: income and its source and stability, fixed and discretionary outgoings, existing liabilities, assets, shared living arrangements and foreseeable changes |
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-b-lenders-and-brokers | Lenders and brokers each meet their own obligations: a broker's preliminary assessment is not a substitute for the lender's, the lender forms its own view of information received from a broker and has processes to test its reliability |
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-b-purpose-sufficiency | Gather enough reliable information about the consumer's requirements and objectives and financial situation to make an informed assessment, with the depth of inquiry scaled to the circumstances |
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-b-refinancing-switching-existing-customers | On a refinance or switch, understand the purpose and the costs, do not assume affordability from the existing loan, and use the licensee's own information about existing customers |
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-b-requirements-objectives | Make inquiries about what the consumer wants from the credit: amount, term, product features, the purpose and the benefits sought, and whether a particular product type or feature is needed |
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-b-verification-benchmarks-hem | Verify the financial situation with reasonable steps (payslips, bank statements, transaction data, credit reports), and use expense benchmarks such as the Household Expenditure Measure only as a check on declared expenses, never as a substitute for inquiry |
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-b-what-is-reasonable-red-flags | Scale the inquiries and verification to the risk of harm: more where the loan is large relative to income, the consumer is or may be vulnerable, the product is high cost or has priority access to income, the information is inconsistent, or the consumer has a history of repayment difficulty |
Section C: assessing whether a credit product is not unsuitable – ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia)
| Code | Title |
|---|---|
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-c-capacity-substantial-hardship | Determine whether the consumer can meet the repayments from income after their necessary outgoings without substantial hardship, applying realistic assumptions about spending reductions, buffers and the repayments across the life of the loan |
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-c-requirements-objectives-prescribed-unsuitable | Assess whether the product meets the consumer's requirements and objectives, including cost and features against alternatives the licensee offers, and apply the prescribed unsuitability circumstances for credit cards, small amount credit contracts and reverse mortgages |
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-c-switching-mortgage-prisoners-review | In a refinance or switch assess overall cost savings and the repayment history, do not treat continued hardship as a reason to keep a consumer in a worse loan, and periodically review assessment outcomes, complaints and automated decision systems |
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-c-unsuitability-test-likely | Assess whether the product is unsuitable at the time of the assessment on what is likely, that is probable, and understand the difference between a broker's preliminary assessment and a lender's final assessment |
Section D: the written assessment and record keeping – ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia)
| Code | Title |
|---|---|
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-d-record-keeping | Keep records that demonstrate compliance: the inquiries made and answers given, the verification documents and data, the assessment and its assumptions, a narrative summary of the consumer's requirements and objectives, and the use of any tools |
| asic-regulatory-guide-209-credit-licensing-responsible-lending-conduct-australia::rg209-d-written-assessment | Give the consumer a free written copy of the assessment on request, within the statutory time, in a form they can understand, covering their details, requirements and objectives, financial position, the product's fit and their capacity to repay |
What is ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia) and who does it apply to?
ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia) is a compliance framework from Australia with 3 domains and 14 controls. ASIC Regulatory Guide 209 (December 2019), the regulator's guidance on the responsible lending obligations of the National Consumer Credit Protection Act: how licensees scale their inquiries into a consumer's requirements, objectives and financial situation, verify income and expenses, use benchmarks such as the Household Expenditure Measure only as a check, respond to red flags, divide responsibility between lenders and brokers, assess whether a product is unsuitable because the consumer cannot repay without substantial hardship or because it does not meet their objectives, apply the credit card, small amount credit contract and reverse mortgage presumptions, handle refinancing and switching, give the written assessment on request, and keep records that show the obligations were met. It is used by organisations to establish and maintain compliance with industry standards and regulatory requirements.
What does ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia) actually require?
ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia) has 14 controls organised across 3 domains. The largest domains are Section B: making reasonable inquiries and verifications – ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia) (8 controls), Section C: assessing whether a credit product is not unsuitable – ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia) (4 controls), Section D: the written assessment and record keeping – ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia) (2 controls). Each control defines specific requirements that organisations must implement to achieve compliance.
If I already comply with another framework, how much of ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia) do I already cover?
ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia) does not currently have cross-framework mappings in our system. Check back as we continuously expand our mapping database.
How do I implement ASIC Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct (Australia)?
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