ASIC eases mortgage broker training requirements
Mortgage broking firms will kick off 2012 in a better frame of mind after ASIC eased training and competence requirements for credit representatives that operate under the organisation’s credit licence.
Since ASIC assumed the mantle of credit industry regulator in July 2010, firms have come under a tougher and more costly compliance regime, which has caused many to exit the industry.
Under the revised regulatory guide (206) credit representatives no longer have to complete a certificate IV in finance and mortgage, but are only required to complete training “as determined by their licensee” so that they are:
- Able to deal appropriately with consumers (gather appropriate information, understand their needs, etc.)
- Have broad knowledge about home loan products and their characteristics (features, fees, etc.)
- Understand the economic and market context, understand basic financial and accounting concepts that relate to home loans and understand real estate terms and concepts
To assist with this training, ASIC has provided “more principles-based guidance on the types of skills and knowledge these representatives should acquire through the training they undertake”.
In addition, ASIC has given credit representatives the option of a “regular knowledge update review”— a test administered by a registered training organisation via a secure facility – rather than undertaking 20 hours of continued professional development such as attending conferences and seminars or publishing journal articles.
“Our revised policy seeks to minimise licensees’ compliance burden while requiring a high standard of training for those who play a significant role in decisions about home loans,” says ASIC commissioner Peter Kell.
ASIC will monitor how the credit industry complies with RG 206 over the next three years.
If, following this period, the regulator is not confident that the more flexible arrangements are effective “it may investigate whether a more prescriptive approach would be appropriate”.