National Consumer Credit: audit implications

I spoke at the Australian Financial Institution Auditors Association Annual Conference yesterday on the topic of the audit implications of the National Credit Act including licensing, credit code changes and responsible lending.

Whilst we don’t know the form yet of the annual compliance certificate required to be lodged by licensees under section 53 of the National Credit Act it appears that as it will relate to the general conduct obligations in section 47, including compliance with “credit legislation” in section 47(1)(d), its scope will be quite wide.

“Credit legislation” is defined in section 5 as meaning:
(a) the National Consumer Credit Protection Act; and
(b) the Transitional Act; and
(c) Division 2 of Part 2 of the ASIC Act and regulations made for the purpose of that Division; and
(d) any other Commonwealth, State or Territory legislation that covers conduct relating to credit activities (whether or not it also covers other conduct), but only in so far as it covers conduct relating to credit activities.

The certificate could therefore extend to compliance with State interest cap restrictions, Privacy Act credit provisions and AML/CTF issues.

And it appears that a credit compliance breach which involves a breach of the ASIC Act (eg unfair contract terms, misleading conduct) could also have implications for a licensee’s AFS licence and completion of FS71.

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