Financial Services and Credit Quarterly Update January 2021

Happy New Year to our subscribers. 

Our latest free quarterly update covering the fourth quarter of 2020 can be downloaded here. 

In the final days of last year, legislation was enacted that contains a multitude of responses to the Hayne Royal Commission. Our update covers these new requirements including:

• the reform of anti-hawking;

• a deferred sales model for 'add-on' insurance; 

• commission caps for add-on products in the motor finance segment; and

• breach reporting for credit licensees.

A Bill has also been introduced to remove the responsible lending obligations, which includes other reforms to credit regulation affecting small amount credit contracts and consumer leases.

A number of new obligations (some of them deferred) commenced on 1 January 2021, among them the best interests duty for mortgage brokers and the ban on conflicted remuneration for credit assistance providers. Other changes are scheduled to commence during the year - October in particular will be a big month for compliance, with many new requirements commencing then. Not the least of these are the Design and Distribution Obligations, for which ASIC finally released its guidance in December. 

Patrick Dwyer and Kathleen Harris
Legal Directors

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