Australian Credit Licence Training for Vendor Financiers

[Lofty]

Hi

The following could be ruled as an ad. If it is, so be it but I know there are a lot of Vendor Financiers out there worried about the requirement to get an Australian Credit Licence (ACL).

Vendor Finance Institute Pty Ltd is about to commence a series of Vendor Finance ACL courses in Sydney, Melbourne, Perth and Brisbane. Details of the course dates are available at:
http://www.vendorfinanceinstitute.com.au/upcoming-events-2.html

The first 3 days of the course is training to complete the Cert IV in Financial Services (Finance/Mortgage Broking) and the 4th day covers the ACL application , as it relates to Vendor Financiers.

Cheers, Paul

 

[Lofty]

Austrlian Credit Licence - which Vendor Financiers need one?

Does my Vendor Finance business need an Australian Credit Licence?


The new National Consumer Credit Protection Act requires anybody or any company who “in the course of a business” provides consumer credit or consumer credit advice, to hold an Australian Credit Licence (ACL) or to be a Representative of an ACL holder.

• You do not need an ACL if you only plan to utilise Lease/Options.

• If you plan to use Instalment Contracts and/or Second Mortgages in your vendor finance (VF) business, you need to be an ACL holder or a Representative of an ACL holder.

• All Vendor Financiers who intend to become Joint Venturers, or who desire to advertise on websites or in the media need to obtain an Australian Credit Licence.

• Even if you only plan to use an Instalment Contract and/or Second Mortgage once, based on the information available from ASIC, it is advisable to get ACL coverage for your Instalment Contract or Second Mortgage. More information on this point follows.

“in the course of a business …”

ASIC Regulatory Guide 203 mentions;

“In relation to the provision of credit, the National Credit Code applies to credit contracts where, among other matters: the credit provider provides the credit in the course of a business of providing credit ….” and

“In relation to credit assistance and intermediaries, the National Credit Act states that a provider of credit assistance or an intermediary comes within the scope of the Act if the relevant credit activity occurs:
... in the course of, as part of, or incidentally to, a business carried on ….”

In some quarters, the above quotes have led to the idea that if only two or three Instalment Contracts or Second Mortgages are undertaken or advised on each year, then the provider of these credit activities will not be seen as providing these activities “in the course of a business”.

The “in the course of a business” question has been addressed by ASIC. Regulatory Guide 203 also mentions;

“We have published guidance about this in Regulatory Guide 121 Doing financial services business in Australia (RG 121) at RG 121.41–RG 121.50. This guidance may be useful for deciding whether you are carrying on a business in Australia for the purposes of the National Credit Act.”

Regulatory Guide 121.42 (g) says;

“You will not be deemed to be carrying on a business in Australia merely because, … you:
conduct an isolated transaction that is completed within 31 days, not being one of a number of similar transactions repeated from time to time;”

Obviously an Instalment Contact and/or a Second Mortgage IS longer than "31 days". Also, two or three Instalment Contracts or Second Mortgages per year IS "a number of similar transactions repeated from time to time".

Cheers, Paul

 

[Rolf Latham]

Hi Paul

must be fun stuff for small volume operators...............I know many of us are struggling with the legal interpretations of some of the "width" of the legislation, Im lost much of the time because 3 different legal firms will provide 3 different views of the same wording.

Some of the most interesting things for wee small businesses is the compliance monitoring, management of conflict of interest, adequate compensation arrangements, and having your financials externally audited every year.


ta
rolf

 

[Lofty]

Hi Rolf

Yes, getting my head around the legislation and the expansive ;-) Regulatory Guides was challenging. However getting our ACL licence number issued last week made it all worthwhile, even if we did have to put together all the policies, declarations and manuals you speak of.

As a small business I found ASIC to be very helpful throughout the whole process and there publication "Guidance for small credit businesses" (INFO 97) was invaluable.

Luckily we were spared the conflicting legal opinions as, with the help of ASIC, we were able to put our application and supporting documentation together ourselves. I have a feeling ASIC would prefer to have a small business licensed than not licensed. Non licensed means the small business is most definitely break the law. Licensed gives ASIC the opportunity to educate small businesses over time, regarding compliance.

Time will tell.

Cheers, Paul

 

[Lofty]

Hi All

The two courses we've run so far, in Sydney and Melbourne, have been well received. Just FYI, our next course, in Brisbane, starts on Wednesday 10 November. The Cert IV runs Wednesday, Thursday and Friday and the ACL Application Day is on Saturday 13 November.

Cheers, Paul

 

[Lofty]

Hi All Vendor Financiers

ASIC recently made it known that unless you get your ACL Application into them by 10 December, you will not receive your ACL before 31 December. 10 December is only 3 weeks away!!

Vendor Finance Institute ran it's last ACL Application - Assistance Day, in Brisbane on 13 November and have no further Assistance Days programmed for this year. In an effort to ensure we help as many Vendor Financiers get their ACL before the end of the year as possible, we have turned the Assistance Day into a DVD set that's available as of today.

The ACL Application - Assistance Day consists of:
1. A manual that shows every page you will encounter during your ACL online application. Plus answer pages, so that you will have all the answers for your application, before you start the actual online application. The manual also contains printouts of all the Manuals, Policies and Documents ASIC require you to have to be eligible for an ACL.
2. A flash drive that contains all the Manuals, Policies and Documents mentioned above, in MS Word format, so you can add your business details to the Templates provided and edit them as required.
3. Me standing in front of you for a day, working through the manual and the contents of the flash drive.

The ACL Application - Assistance Pack is the same as the Assistance Day, except we replace me, standing in front of you for a day, with a set of two DVD's, of me working through the manual and the contents of the flash drive. All in all, 3 hours and 16 mins of sheer excitement ;-)

The DVD set, i.e. our Assistance Pack, will allow you to work at your own pace, while still covering all the information provided at the Assistance Day.

10 December isn't far away. The Assistance Pack is available at:
http://www.vendorfinanceinstitute.com.au/acl-pack.html

Included in the price are four, 15 minute support calls directly to me. I look forward to talking with you.

Cheers, Paul

 

[Rolf Latham]

Thank you Paul for helping to making sensible, alternative finance options an ongoing reality

ta
rolf

 

[Lofty]

Hi All Vendor Financiers

Awhile back ASIC made it known that people/businesses who had Registered for the ACL prior to 30 June, needed to submit their ACL applications prior to 10 December, to ensure they would get their ACL's issued prior to 31 December (the cut-off date for Registration validity).

Just last week, two ACL Assistance Pack students who had Registered and submitted their applications after 10 December where told that, as long as Registered people/businesses have lodged a full application prior to 31 December they will be OK to continue their businesses until their applications are either rejected or accepted.

So, if you're Registered and you thought it was too late, you still have until the end of the month to submit your full application.

Cheers, Paul

 

[Rolf Latham]

Hi Paul

I can confirm that this seems to be the general view on our side of the fence too

ta
rolf