New Finance Licensing Laws

In an effort to better regulate lending in this country the Federal Government introduced new legislation known as the National Consumer Credit Protection Amendment Act 2010.  This new legislation is designed to make borrowing money safer for consumers, through the implementation of new safeguards for borrowers.  Prior to this new legislation, each state operated under different acts of law, so this national legislation has been a welcome outcome for professionals within the industry.

Empower Wealth is pleased to advise that we have met the new ASIC requirement to secure our licence prior to the 1 January 2011 deadline date set in July of last year.

Under the new laws, lenders or their agents (Brokers) are required to make sufficient enquiries regarding the borrower’s ability and capacity to repay the loan.  This basically means that much higher scrutiny will now take place in terms of better understanding our clients’ financial position.

Empower Wealth has implemented a new and detailed fact find worksheet to better assess the ability of our clients to meet their lending obligations, ensuring the loan is suitable.  These increased compliance measures are going to mean that securing credit will be much more time consuming for the borrower to make an application for credit.

Such a decision by the government will mean that it will be much harder for those that want to conduct their business directly with a lender, such as a bank or credit union, not to mention the time it will take.  Imagine spending a few hours with each lender you want to compare products on as they go through their own extensive compliance checklists to ensure you are even eligible to borrow money with them.  A potentially huge waste of time compared to working with a Professional Qualified and Licensed Credit Planner like Empower Wealth, who’s going to be able to use the information we have collected from you just once to shop for hundreds of loan options.

With time being such a limited resource, being able to source  a vast choice of loan and lender products from a broker, should see even more borrowers understanding the benefit of dealing with brokers over a lender directly.  Remembering brokers only care about their clients and not the lenders’ big profits.