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ABA welcomes new RG 209 guidance

by Annie Kane5 minute read

The Australian Banking Association has welcomed the new guidance on responsible lending, stating that it is an “important milestone” in clarifying responsible lending obligations for banks.

On Monday (9 December), the Australian Securities and Investments Commission (ASIC), released its much-anticipated guidanceRegulatory Guide 209: Credit licensing: Responsible lending conduct (RG 209).

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The 96-page updated guidance on responsible lending conduct aims to provide greater clarity and support to lenders and brokers in meeting their obligations and reflects ASIC’s view of the current state of the law.

While the guidance was first issued in 2010 and last revised in November 2014, it has now been updated to reflect a number of developments since the guidance was last updated.


These include: ASIC’s regulatory and enforcement actions (including court decisions); ASIC’s thematic reviews on various parts of the industry such as interest-only loans; the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry; recent and upcoming initiatives such as comprehensive credit reporting and open banking; and changes in technology.

Speaking following the release of the release of the guidance, the CEO of the Australian Banking Association, Anna Bligh, said that the updated RG 209 would provide clarity to banks on ASIC’s views on what responsible lending obligations require before offering credit to customers.

“Our member banks take their responsible lending obligations seriously as they seek to comply with the law and meet customer demand to access timely and appropriate credit,” Ms Bligh said.

“This is an important document for the industry to guide each bank’s approach to responsible lending, which we will now study closely to assess any impacts it may have on borrowing for customers.

“The industry is pleased to see ASIC has maintained a principles-based approach to lending, which as an industry we have called for, and to ensure banks are able to fulfil their obligations without the process becoming too restrictive for customers.

“The industry also welcomes ASIC providing greater clarity in some areas, such as where it is difficult to determine income from certain customers, such as small-business owners and gig-economy workers,” she said.

[Related: ASIC to prolong HEM dispute with Westpac]

ABA welcomes new RG 209 guidance
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Annie Kane

Annie Kane


Annie Kane is the editor of The Adviser and Mortgage Business.


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