Every single lender of instant cash loans in Australia has to adhere to the requirements of the Regulatory Guide 209 in order to ensure that they meet all the responsible lending obligations as determined by the Australian Securities and Investments Commission (ASIC). The level of inquiries that are reasonable is likely to be greater where the borrower is refinancing, particularly where they are having difficulties meeting the repayments, or are even in arrears, on their existing loan contract. In this situation, it will be possible to determine that the borrower cannot meet the repayments of the amount being charged under that contract and a contract will prima facie be unsuitable where the repayments are at the same or a similar level.
Lenders and borrowers of instant cash loans in Australia need to know that where the current contract is no longer not unsuitable and no alternative contract is considered to be not unsuitable, there is a defence provided that allows the loan lender to suggest that the borrower remain in the contract without contravention of the responsible lending obligations. When guidance about providing a written assessment that a loan contract is not unsuitable the lender must, if requested, provide the borrower with a copy of the assessment that the loan contract is not unsuitable. ASIC's expectations in relation to the form of this document are such that under the National Credit Act, the lender must, if requested, provide free of charge to the borrower a copy of the assessment that the loan contract is not unsuitable for the borrower.
Lenders of instant cash loans in Australia must realise that in practice, this means that the lender must keep a record of the assessment in a form that allows the lender to provide the assessment to a borrower promptly and in writing. The National Credit Act also sets out timeframes in which the written assessment must be provided as well. There is certain information that should be included in a written assessment. ASIC expects that this written assessment will be concise and easy for borrowers to understand and that it will also include reference to the relevant factual information provided by the borrower that the lender used to assess the loan contract as not unsuitable. Lenders should ensure that the written assessment that they provide to consumers will assist borrowers in understanding that the loan contract has been assessed as not unsuitable for them and assist the lender in demonstrating compliance with the responsible lending obligations. The lender should also ensure that the borrower has the opportunity to check the factual basis on which the lender has made the assessment, as stated by the lender in the written assessment, so that if it is inaccurate the borrower can raise the matter with the lender. This means that the assessment should include a record of the financial information obtained as well as the requirements and objectives communicated by the borrower.
Lenders and borrowers of instant cash loans in Australia need to know that where the current contract is no longer not unsuitable and no alternative contract is considered to be not unsuitable, there is a defence provided that allows the loan lender to suggest that the borrower remain in the contract without contravention of the responsible lending obligations. When guidance about providing a written assessment that a loan contract is not unsuitable the lender must, if requested, provide the borrower with a copy of the assessment that the loan contract is not unsuitable. ASIC's expectations in relation to the form of this document are such that under the National Credit Act, the lender must, if requested, provide free of charge to the borrower a copy of the assessment that the loan contract is not unsuitable for the borrower.
Lenders of instant cash loans in Australia must realise that in practice, this means that the lender must keep a record of the assessment in a form that allows the lender to provide the assessment to a borrower promptly and in writing. The National Credit Act also sets out timeframes in which the written assessment must be provided as well. There is certain information that should be included in a written assessment. ASIC expects that this written assessment will be concise and easy for borrowers to understand and that it will also include reference to the relevant factual information provided by the borrower that the lender used to assess the loan contract as not unsuitable. Lenders should ensure that the written assessment that they provide to consumers will assist borrowers in understanding that the loan contract has been assessed as not unsuitable for them and assist the lender in demonstrating compliance with the responsible lending obligations. The lender should also ensure that the borrower has the opportunity to check the factual basis on which the lender has made the assessment, as stated by the lender in the written assessment, so that if it is inaccurate the borrower can raise the matter with the lender. This means that the assessment should include a record of the financial information obtained as well as the requirements and objectives communicated by the borrower.
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