In short, the businesses that require an Australian Credit Licence (ACL) are:
- credit providers
- credit service providers
- finance brokers
- mortgage managers or aggregators
- other intermediaries.
‘Credit’ is defined as provided for personal, domestic or household use, or for the purchase, renovation or improvement of the value of a residential investment property. Credit otherwise provided for investment purposes is expressly excluded.
Persons engaging in ‘credit activities’ include:
- credit providers under credit contracts and lessors under consumer leases (including in their capacity as mortgagees or beneficiaries of guarantees where the contract or lease is secured or guaranteed); and
- others who provide ‘credit services’, such as finance brokers, mortgage managers or aggregators and other intermediaries who have a direct or indirect role in securing credit for a customer, or suggest, or provide assistance in respect of, a specific product with a particular credit provider.
An ACL is be required if these persons engage in, among other activities, any of the following:
- providing credit or consumer leases, including engaging in pre-contractual conduct;
- activities in relation to a mortgage or guarantee where the mortgage or guarantee is taken to secure or guarantee obligations under a credit contract or consumer lease;
- collecting money due under a credit contract (including where the lender is no longer providing credit, or where debt collectors or mortgage managers manage the contract on the credit provider’s behalf); or
- receiving by assignment and subsequently exercising the rights of a credit provider or lessor.
The Regulations provide exemptions for receivers and managers, liquidators and registered debt agreement administrators from requiring a licence. Financial counselling agencies are also exempted in certain circumstances.
If you are unsure whether your business is covered, or would like to obtain further assistance, please contact Sophie Grace directly.