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ASIC releases guidance on administrative powers to enforce new consumer credit legislation
10-231AD ASIC releases guidance on administrative powers to enforce new consumer credit legislation
Wednesday 10 November 2010
ASIC has today released new regulatory guidance to help the credit industry better understand ASIC’s administrative powers to enforce the new consumer credit legislation.
Under the National Consumer Credit Protection Act 2009 (National Credit Act) - which came into effect on 1 July 2010 - ASIC has a number of powers available to it to enforce the law, including through criminal, civil, and administrative remedies.
Regulatory Guide 218 Licensing: Administrative action against persons engaging in credit activities (RG 218) describes the administrative powers that are available to ASIC to enforce the new legislation. Such powers include, for example, - suspending or cancelling a credit licence, banning a person from engaging in credit activities, or varying or imposing conditions on a licence.
ASIC's powers are effective in the transition to the new legislation (i.e. until 1 July 2011), and beyond that date.
In exercising its powers under the National Credit Act, ASIC’s priority is to protect the public and reinforce the integrity of the consumer credit industry.
In order to inform the credit industry, ASIC is issuing RG 218.
RG 218 outlines the matters ASIC takes into account in determining whether administrative action is the most appropriate response in a particular case (relevant matters could include, for example, the nature and seriousness of suspected misconduct; the previous regulatory record of the licensee).
RG 218 also provides some indicative guidance on the kinds of factors ASIC will consider when determining the length of a banning order, including providing examples of relevant misconduct for illustration.
While ASIC assesses each matter on a case-by-case basis, the non-prescriptive factors - and the examples - set out in RG 218, are intended to provide transparency as to how ASIC determines the most appropriate regulatory response in a case.
Under the National Credit Act, ASIC is responsible for regulating persons who engage in consumer credit activities, including by licensing those people, monitoring licensees for on-going compliance, and taking action – including the type of action described in RG 218 – where the law is breached by a licensee or a person who acts on behalf of a licensee.
For further information:
ASIC Media Unit
Telephone: 1300 208 215