ASIC to hold public hearings on responsible lending
The corporate regulator will be holding public hearings as part of its recent move to initiative public consultation on its responsible lending guidance.
In February ASIC issued an industry consultation paper as it sought to update its guidance on responsible lending.
“This will encourage more consistent practices across the industry, while retaining flexibility for licensees to appropriately tailor lending processes to the circumstances of borrowers, ASIC chair James Shipton said at an industry event in Melbourne on Thursday.
“And, for the first time as part of this process, we will be holding public hearings to robustly test some of the issues and views that have been raised in submissions,” he said.
While the ASIC chair acknowledged that responsible lending requirements have remained unchanged for almost a decade, “through any economic cycle responsible provision of credit is critical to the long-term sustainability of the economy as well as being a cornerstone consumer protection.
“This is why we have the responsible lending requirements and why we are consulting to update our expectations on them,” he said.
Shipton also provided an update on ASICs close and continuous monitoring program (CCM), with meetings already held with more than 425 banking staff at all levels,
Here he also moved to clarify the objectives of ASIC’s new supervisory approaches, including the CCM and the corporate governance review.
“These supervisory activities are focused on the early identification of deficient practices in specific areas inside entities. They are also aimed at promoting improved corporate governance and corporate culture over the long term,” he said.
As part of this supervisory work, ASIC been providing important, detailed and targeted feedback to CEOs, Chairs and other business leaders on our concerns and observations.
“We emphasise that while the objective of supervisory activities is preventative in nature,” but warned that “if ASIC identifies illegal behaviour during the course of our supervisory work we will actively consider the appropriate regulatory response, including enforcement”.
Ultimately, he warned that the ‘first line’ compliance responsibilities sit with licensees.
“Our supervisory efforts are aimed at improving financial firms’ ability to fulfil that cornerstone responsibility.
“We plan to provide further commentary on the findings of our CCM and corporate governance work in due course.”
On the royal commission front, the corporate regulator is continuing to investigate and where appropriate even litigate from the 13 referrals and 30 case studies arising from the public inquiry.