ASIC has told lenders it expects them to offer tailored assistance in situations where borrowers require further support when a loan deferral ends. It said that based on its observations, more needs to be done.
The regulator has published guidance for lenders, setting out its expectations when deferrals end. It said it would closely monitor how lenders are handling the issue and how they are assisting customers experiencing financial hardship.
ASIC said: “Lenders must do all things necessary to ensure that the credit activities authorised by their licence are engaged in efficiently, honestly and fairly.
“As such, we expect lenders to have processes in place that will allow for an orderly transition and, importantly, deliver appropriate and fair outcomes.
“ASIC expects lenders to make all reasonable efforts to work with consumers to keep them in their homes if that is in their best interests.”
To fulfil their obligations, lenders should make reasonable efforts to contact consumers prior to their repayment deferral expiring.
They should give consumers information that will assist their decision-making.
In circumstances where a lender determines that it would be appropriate to offer further assistance to a consumer, their process “should be flexible and empower staff to offer tailored assistance that genuinely addresses the needs of the consumer.”
Lenders should keep records setting out the assistance options offered in each case.
In cases where a consumer’s repayment deferral expires and they miss a repayment, lenders should make reasonable efforts to contact the consumer and assess the appropriateness of further assistance.
ASIC said that based on its engagement so far, lenders could do more to provide customers with personalised information about how different arrangements may affect them over the long term.