Regulations are a key issue for commercial and asset finance brokers. Talking to Australian Broker TV, David Gandolfo, president of the Commercial & Finance Asset Brokers Association of Australia (CAFBA), shared how his association stays on top of regulatory changes and how it makes sure “remedies are not inappropriate or inhibit access to credit.”
Gandolfo said it is important for CAFBA to participate in inquiries and reviews to make sure the recommendations distinguish between commercial and asset finance lending and consumer lending.
“I’ve got the Productivity Commission report, the Royal Commission, and there's been a number of ASIC and other inquiries which we've had to answer or submit to,” Gandolfo said. “A lot of the findings and the questions that arise out of those commissions don't necessarily directly affect us, but we have to make sure that we answer those in a context that won't affect our members or that the regulatory recommendations that are made make the distinction between commercial finance and the use of commercial finance and the outcomes for customers and the protections that need to be afforded to consumers, because commercial lending and consumer lending are both very, very different, and you can't apply a remedy in one area that's not appropriate for the other area.”
Gandolfo said commercial lending “is the enabler which allows businesses to grow and prosper,” and a key concern for his association is about the application of responsible lending guidelines for consumers to commercial lending.
“What we are concerned about is that there are responsible lending guidelines which apply to consumers which are starting to be applied to commercial lending which are not appropriate … and… are an inhibitor to commercial lending,” he said.
To address the issue, Gandolfo said CAFBA has been working to make sure regulators understand the difference between consumer credit and commercial credit as well as the outcomes unique to consumer lending and to commercial lending.
“We have been making those distinctions very, very clearly,” he said. “But we do that not just as an outcome for our customers and for our brokers, but so that regulators can correctly regulate and not apply remedies to problems that simply don't exist or apply remedies in areas where those remedies would be inappropriate or an inhibitor to access to credit.”
