Post on 29-Jun-2015
description
CREDIT INTERMEDIARIES AND
AGENCY
Philip Haultain
Special Counsel
National Australia Bank
Credit Intermediaries and Agency
Purpose
The Nature of Agency - Consent, authority, fiduciary obligation
- Acts binding the principal
- Knowledge imputed to the principal
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Credit intermediaries and agency
The nature of credit intermediaries - Finance brokers
- Mortgage Managers
- Referrers
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Credit intermediaries and agency
Credit intermediaries as agents - NCCP approach
- Finance brokers
* prima facie assumption
* Tonto Home Loans v Tavares
* Permanent Mortgages v Van den Bergh
- Mortgage Managers
* Micarone v. Perpetual Trustees
* Bartle v GE Custodians
* Perpetual Trustees v Schmidt
* Interstar cases
- Referrers
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Credit intermediaries and agency
Duties of agents
- common law
- NCCP general conduct obligations
Remuneration - common law
- section 114 NCCP
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Credit intermediaries and agency
Termination
- common law
- automatic termination under NCCP
ACL holder duties
- efficiently, honestly and fairly
Credit monitoring review
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Why are referrers potentially regulated?
A business needs to be licensed
(or appointed as a CR) if it is providing a ‘credit
service’
A credit service occurs if a person as part of, or
incidentally to, a business either:
Provides credit assistance
Acts as an intermediary
Main categories of referrers
Non-business related referrers
Business related referrers who do not provide
customer contact details to lenders / brokers
Business related referrers who do provide
customer contact details to lenders / brokers
Website referrers
Licensed intermediaries
Importance of business origination
A key customer touch point
Subsequent ‘information repair’ may be
insufficient to negate original perceptions
Marketing material
Content becomes critical
Example – what is a ‘standard variable rate
loan’?
Is the rate advertised available to all borrowers?
Is the rate a ‘teaser’ rate?
Comparison sites – comparing like with like?
Internet as source of business
Categorisation of site often hard
Advertisement v referral
Click through
If a referral – hard to argue incidental to a
business when the service is advertised
Is there a suggestion of a specific contract with a
specific lender?
Intermediaries
• Unlicensed and licensed
• Does the second credit assessment serve any regulatory purpose?
Intermediaries
Aggregators
Liability to lenders
Liability to borrowers
Data retention