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10-175MR ASIC issues first 65 Australian credit licences using easy-to-use process

Thursday 19 August 2010

ASIC has issued 65 licences under the new National Consumer Credit Protection Act 2009 (National Credit Act) since 30 June 2010. ASIC has also received 411 credit licence applications.

Under the National Credit Act, anyone engaging in credit activities must be licensed, or authorised as a representative of someone who is licensed. Registration for existing businesses intending to be licensed closed with ASIC on 30 June 2010. Approximately 14,760 registrations were received. ASIC has proceeded, since then, to process applications for licences from parties that registered by 30 June.

Registered parties have until 31 December 2010 to apply to be licensed.

By 30 June 2011, credit licensing will be complete and, by then, anyone providing credit or credit advice must be licensed or be a representative of someone who has a licence.

Mortgage brokers, financial planners, financial advisors, and companies providing credit (including, but not limited to, banks, building societies, credit unions, and finance companies) are among those who are being licensed under the National Credit Act.

The National Credit Act requires those who are licensed to engage in credit activities, to observe new statutory standards, including observing responsible lending practices and mandatory membership of an approved external dispute resolution (EDR) scheme.

Overall, the National Credit Act provides a unified, Australia-wide regime that is intended to provide better outcomes for consumers and reduce compliance costs for industry by providing a single national consumer credit law.

ASIC Commissioner, Dr Peter Boxall, said ASIC has already received very positive and unsolicited feedback regarding the ease of applying for a credit licence.

‘Applications are 100 per cent online and have been designed to be as straightforward as possible for the applicant.

‘Our focus from the very first day has been to learn from our previous licensing experience and to cut unnecessary red tape and the cost of compliance for credit participants,’ Dr Boxall said.

‘We were particularly concerned about the large number of one-person mortgage and finance brokers that are operating small businesses and ensuring that they could choose to complete the process themselves, without having to pay for further advice or help.
‘We have self-help tools and information specially designed for small business, in addition to our ASIC enquiry line 1300 300 630 which is ready and waiting to answer any questions from industry.

‘Applicants are pleasantly surprised at how straightforward the application process is and very pleased to be among the first to receive an Australian Credit Licence,’ Dr Boxall said.

Following is the distribution of the first 65 licences according to State or Territory:

New South Wales: 14
Victoria: 10
Queensland: 12
South Australia: 2
Western Australia: 26
Tasmania: 0
ACT: 1
Northern Territory: 0

Distribution of the first 65 licences according to segment is:

Credit unions and other providers: 5
Intermediaries (brokers etc): 60

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