ACL registration opens for credit licensees
Lenders, brokers and intermediaries dealing in consumer credit can now register for an Australian Credit Licence (ACL) under the new National Consumer Credit Protection Act. The Act establishes a national licensing regime that requires providers of consumer credit and brokers and intermediaries to obtain a licence from the Australian Securities and Investments Commission (ASIC).
The ACL is a key component of the new scheme and registration starts today, April 1, 2010, and runs until June 30, 2010. However, to ensure applications are processed in time applicants are encouraged to register by June 18, 2010.
Registering with ASIC would allow people to continue to engage in credit activities from July 1, 2010, until the licence application process is complete. Registered credit participants would then have six months to apply for an ACL between July 1, 2010, and December 31, 2010. Those who fail to register would be required to stop engaging in credit activities until they procure a credit licence.
There are no fees for registration and the process can be completed online. Those registering would need to prove they could meet certain requirements that would be applicable to them as credit licensees and membership of an external disputes resolution body is also required. Background checks would also be necessary and updates to ASIC's existing registers would also be made.
Lenders that intend to continue operating in the credit lending arena would also have to register for an ACL. The licence and obligations of the ACL would cover both old and new loans. Lenders not offering loans or leases after July 1, 2010, but still continuing to collect payments due under pre-existing contracts would have the option to register and apply for an ACL. If they do not have a licence they would need to meet similar statutory requirements to licensing so that ASIC can monitor their conduct and compliance with the law. They would also have to notify ASIC of any pre-existing contracts.
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