Vendor Finance Institute
Hi grossreal
Here is the contents of a report we normally send out via a Vendor Finance Institute website:
Vendor Financiers and the Australian Credit Licence
Registration for the Australian Credit Licence
Registration for the Australian Credit Licence (ACL) closed on 30 June 2010. The Registration process allowed current Vendor Financiers to continue to operate their Vendor Finance business until 31 December 2010.
Businesses that Registered prior to 30 June, then have from 1 July 2010 to 31 December 2010 to make a full Application for the ACL.
Do I need an ACL?
The new National Credit Act requires anybody who is “in the business of” providing consumer credit or consumer credit advice, to hold an ACL
1. You do not need an ACL if you only plan to utilise Lease/Options.
2. If you plan to regularly use Instalment Contracts and/or Second Mortgages in your vendor finance (VF) business, you need to be an ACL holder or an accredited Representative of an ACL holder.
3. Even if you only plan to use an Instalment Contract and/or Second Mortgages once or twice a year, it is advisable to get ACL coverage for your Instalment Contracts and/or Second Mortgages, as the new National Credit Code does not clearly define the meaning of “in the business of …”.
If You Registered
If you Registered before 30 June 2010 you may continue your vendor finance business under this Registration until 31 December 2010. This gives you from 1 July 2010 until 31 December 2010 to apply for and gain an ACL, or alternatively, become an accredited Representative of an ACL holder.
While operating your VF business under the authority of a Registration you must ensure you operate within the rules and guidelines of the new National Credit Code (NCC).
If You Did Not Register
Registering for an ACL is no longer available. If you didn’t Register for an ACL before 30 June 2010 and you wish to operate a vendor finance business that needs ACL coverage, you have three options:
1. Become an accredited Representative of an ACL holder or ACL Registrant. (An ACL Registrant will have to gain an ACL to operate their business, after 31 December 2010.)
2. Enter into a Joint Venture with an ACL Holder or ACL Registrant for a specific transaction that requires ACL coverage.
3. Apply for an ACL from ASIC. You should ensure that any transactions requiring ACL coverage are not undertaken until you gain your ACL or have ACL coverage via points 1 and 2 above.
Not “in the business of …”
Nothing in the new National Credit Act requires you to hold an ACL to provide credit for the sale of your own property(s). However all sections of such a transaction must be structured in accordance with the requirements of the new NCC.
This includes the pre sale checks you must carryout, ensuring the Contract documentation complies with the new NCC and that the on going administration of the resulting loan complies with the new Code.
While an ACL may not be mandatory in this situation, it may leave you open to non compliance with the new Act, if you do not get advice and assistance from an ACL holder or Registrant.
ACL Courses
Vendor Finance Institute Pty Ltd will soon commence courses to assist Vendor Financiers gain their ACL . The “ACL Application Course” will run for four days and is designed to have you ready for a full ACL application upon its completion.
The aim of the Course is for you to complete a Certificate IV in Financial Services and have sufficient tools, policies and manuals in place, at Course completion, to allow you to complete the ACL application.
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Course timings will be released soon.
My feeling is the ACL will make the Vendor Finance industry much more accountable, will help to remove any remaining "cowboys" and build a solid foundation for the future growth of the industry. Thanks.
Cheers, Paul