ARCA’s Responsible Lending work group is focused on establishing a framework of ‘good industry practice’ in relation to responsible lending practices – while maintaining the inherent flexibility of the responsible lending obligations to allow for innovation and competition.
ARCA supports the aim of the National Consumer Credit Protection Act 2009 (NCCP) responsible lending obligations which require consideration to be given to whether the customer can afford the loan without substantial hardship. A purely ‘credit risk’ focus to lending is not an appropriate or sustainable approach to lending for both industry and consumers.
ARCA considers it essential that industry takes responsibility for what ‘good’ responsible lending conduct looks like. Doing so benefits industry and consumers, and reduces the risk of further prescriptive obligations being imposed upon it.
As the peak industry association for businesses that use credit reporting and other consumer data for credit risk and credit management in Australia, ARCA’s Responsible Lending work group is uniquely placed, bringing together experts from a diverse range of credit providers in Australia with the relevant skills required, to do this work.