(Australian Associated Press)
Australia’s corporate regulator has sought to clear up confusion over its responsible lending guidelines, confirming that small business loans are not covered.
Australian Securities and Investment Commission chair James Shipton confirmed the point on Tuesday in response to confusion from both politicians and the banks.
“If the predominant purpose of the loan is for business purposes it is not captured by the responsible lending obligations,” he told parliament’s finance committee in Sydney.
“Which is an important point of clarity because there has been concerns raised by industry leaders and lenders as to the applicability.”
The regulator will release its updated guidelines in December in a bid to provide further clarity.
The guidelines haven’t been refreshed since 2014, with Mr Shipton admitting they had not stayed relevant in the face of rapid technological changes.
In a speech last week, ASIC commissioner Sean Hughes had sought to clarify that small business loans were not included in the responsible lending guidelines but the committee said confusion remained in the sector.
Mr Shipton siad there were a range of credit and business issues when it came to small business lending, which were outside ASIC’s jurisdiction.
“There’s only so much we can do,” he said.
In his opening statement, Mr Shipton said ASIC had a 24 per cent increase in enforcement investigations, and a 134 per cent increase in investigations relating to the major banks, since February 2018.