The great divide

The Australian Securities and Investment Commission released their updated RG209 guidelines for all credit licensees (banks, mortgage brokers, finance companies, etc).

This is the most astonishing example ASIC gave on how a lender can meet their Responsible Lending Obligations of the National Consumer Credit Protection Act 2009 (Commonwealth).

Moksha is a barrister earning more than $1,000,000 a year. She holds deposit and trading accounts with ABC Bank as well as credit products including a credit card, line of credit, overdraft facility and a home loan. ABC Bank has allocated a private banker to manage its relationship with Moksha which includes periodic reviews of Moksha’s facilities and discussions with Moksha about her banking, investment and credit needs.

Moksha decides to purchase a new home and contacts her private banker. As the private banker has access to significant amounts of information about Moksha’s financial situation, inquiries and verification are largely limited to confirming Moksha’s credit facilities with other institutions.


While the rich and wealthy get an easy home loan application process that may result in "sign here, get a loan" the rest are put through the mincer.


As ASIC states "As a credit licensee, you must decide how you will meet the responsible lending obligations".

The onus still remains on each credit licensee to minimise the risk of non-compliance.


It would have been beneficial to non-wealthy consumers to change lenders and get much lower interest rates and avoid the loyalty tax if the incoming lender only had to check home loan account conduct before approving the loan.