Lenders’ responsible lending obligations have been a fluid topic in the wake of the Hayne Royal Commission’s final report in February 2019. In that report, Commissioner Hayne said that he was ultimately not persuaded that the National Consumer Credit Protection Act 2009 (Cth) (NCCP) needed to change in that aspect. His view was that the responsible lending issues uncovered by
the Commission would be resolved by the banks “…applying the law as it stands”.
Therein lies the problem though. Different views have been taken as to what the law requires, including recently between ASIC and the Federal Court. ASIC has stated that the responsible lending decision in ASIC v. Westpac in August 2019 (currently on appeal) “…creates uncertainty as to what is required for a lender to comply with its assessment obligation…”. Notwithstanding, ASIC released updated guidance RG 209 pertaining to responsible lending in December 2019, in part based on unusual public hearings it conducted with banks, consumer groups and others in August 2019.
Against the backdrop of this moving feast, considering the updated RG 209 and the surrounding context provides some practical insights for Australian credit licensees moving forward.
Susan Forrest, Partner
 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Final Report dated 4 February 2019, page 117.
 Australian Securities and Investments Commission v Westpac Banking Corporation (Liability Trial)  FCA 1244
 Media release, 19-246MR ASIC to appeal Westpac responsible lending Federal Court decision, 10 September 2019