CREDIT INTERMEDIARIES AND AGENCY Philip Haultain Special Counsel National Australia Bank
Jun 29, 2015
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
2 Footer
Credit intermediaries and agency
The nature of credit intermediaries - Finance brokers
- Mortgage Managers
- Referrers
3 Footer
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
4 Footer
Credit intermediaries and agency
Duties of agents
- common law
- NCCP general conduct obligations
Remuneration - common law
- section 114 NCCP
Footer
Credit intermediaries and agency
Termination
- common law
- automatic termination under NCCP
ACL holder duties
- efficiently, honestly and fairly
Credit monitoring review
6 Footer
Jon Denovan – Partner, Gadens
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 – the personal touch
Aggregators
Liability to lenders
Liability to borrowers
Data retention