In short, the businesses that require an Australian Credit Licence (ACL) are; credit providers, lessors, credit service providers (finance brokers and mortgage managers or aggregators), and other financial 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 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.