Lenders offering small loans to low income earners and reverse mortgages to retirees will have to meet a higher responsible lending standard than lenders and lessors offering standard products.Yesterday, the Australian Securities and Investments Commission issued a revised regulatory guide to responsible lending conduct (RG 209), which covers amendments to the National Consumer Credit Protection Act.From March 1, small-amount lenders (including payday and micro-finance lenders), reverse mortgage lenders and providers of consumer leases will be covered by the legislation and will be regulated by ASIC.The primary responsible lending obligation is to conduct an assessment that the credit contract or consumer lease is "not unsuitable" for the consumer.A finance contract is unsuitable if it likely that the consumer will be unable to meet his or her payment obligations or the contract does not meet the consumer's needs.Under normal circumstances, credit providers and lessors must make inquiries about the consumer's requirements and objectives in relation to the credit contract, and make reasonable inquiries about the consumer's financial situation.Reasonable inquiries about a consumer's financial position would include current amount and source of income or benefits, other income sources, the extent of fixed and variable expenses, discretionary expenditure, credit history, assets and foreseeable changes to financial circumstances.Credit providers will have to able to demonstrate that they have processes in place to ensure adequate inquiries are made.These obligations do not apply only to new contracts. They also apply when a credit provider is considering increasing a credit limit.There are additional requirements for small amount contracts. ASIC's view is that if a consumer is on a low income even a small loan can cause financial difficulties. "Therefore, in this situation we expect that you will need to make more inquiries in order to meet your obligations," the guide says.More extensive inquiries will also be required where it is evident that the borrower has limited capacity to understand the credit contract or lease. For example, they may have limited English language skills.For small-amount credit contracts the lender must make inquiries about whether the consumer is currently in default under an existing small-amount contract, or has been a debtor under two small-amount contracts in the 90-day period before the assessment. The lender must also make inquiries about how much, if any, of the consumer's income is received from Centrelink. Where at least half the gross income is from Centrelink, small-amount credit contracts are prohibited.Lenders must obtain a recent bank account statement from an applicant for a small-amount loan.On the subject of reverse mortgages, ASIC's position is that these are a more complex type of credit contract. "If a reverse mortgage is unsuitable, the consequences for the borrower may be severe," the guide says."We would expect a high standard of investigation and verification to ensure a reverse mortgage product meets the consumer's requirements and objects. An inquiry into a consumer's eligibility to receive Centrelink payments [and how a reverse mortgage might impact on that eligibility] is an essential component of this investigation."The credit provider must also give a reverse