Who needs an Australian credit licence?

Any person who engages in a credit activity must hold an Australian credit licence (ACL), unless the person is a credit representative of an ACL holder or otherwise exempt.

For information on the requirement to hold an ACL, see Who needs an Australian credit licence?

Exemptions from the requirement to hold an ACL

There are also specific exemptions from the requirement to hold an ACL. These exemptions provide that a person engaging in a credit activity is not required to hold an ACL when engaging in the activity, even though the credit contract or consumer lease to which the activity relates is regulated by the National Credit Code (NCC).

The main exemption is for employees or directors of a licensee or of a related body corporate of the licensee and for credit representatives of the licensee.

For information about exemptions from the requirement to hold an ACL, see Exemptions from the requirement to hold an ACL.

Credit providers and credit service providers (credit assistance providers and intermediaries)

Licensing requirements relate to credit providers and credit service providers. Credit service providers are people who provide credit assistance or who are intermediaries.

Both credit providers and persons who are credit service providers (whether providing credit assistance or acting as intermediaries) require an ACL to carry out credit activities, unless they are otherwise exempt.

For more information about credit providers and credit service providers see Credit providers and credit service providers (credit assistance and intermediaries).

Primary requirements of a licensee

An Australian credit licensee must comply with the general conduct obligations of the licensee set out in the National Consumer Credit Protection Act 2009 (Cth) (NCCPA). There are numerous general conduct obligations including a general obligation to do all things necessary to ensure that the credit activities authorised by the licensor are engaged in efficiently, honestly and fairly. There are also obligations in relation to competence, risk management and resources, compliance, conflicts of interest and dispute resolution.

For information on the primary requirements of licensee under an ACL, see Primary requirements of a licensee.

Licence applications and variations

To obtain an ACL, a prospective licensee must apply to ASIC and supply supporting documentation. Applying for an ACL can be done online.

Licence applications require information supporting the application including a statement of personal information about each of the proposed “fit and proper people” as well as national criminal history checks and bankruptcy checks for each of them.

The application must also nominate at least one person as a responsible manager. The licence applicant is required to include information about the proposed responsible managers including their educational qualifications and previous employers where their experience was gained.

Other information which needs to be provided in support of an application for an ACL is proof of EDR scheme membership and a summary of the proposed business to be carried on under the licence.

For information on applications for an ACL, see Licence applications and variations.

Enforcement and sanctions relating to ACLs

It is an offence for a person to engage in “credit activity” if the person does not hold a licence authorising the person to engage in the credit activity. There are also other prohibitions relating to advertising and the conduct of a business without a licence.

ASIC may impose conditions on an ACL and may also suspend or cancel an ACL following a hearing.

For information about enforcement and sanctions relating to ACLs see Enforcement and sanctions.