Requirements of a sound NCCP Compliance Program
All businesses have obligations that they must meet. These obligations arise from a variety of sources including:
- laws and regulations
- internal policies and procedures
- contractual arrangements
- risk treatment (continuous improvement) initiatives.
Compliance is a management discipline that aims to ensure we comply with our obligations. A Compliance Program lays the foundations of our business identity and success in a fashion that complies with both the letter and spirit of the law. The program will need to be aligned with AS 19 600 As well as being a negative expression of who we are as a business, failure to meet our compliance obligations can have a range of consequences from customer complaints and loss of customers to fines and legal sanctions.
Complying with our obligations means we are doing the right thing and most importantly allows us to focus on our core business without distraction. Compliance leads to increased productivity, increased profitability and increased business value. An effective compliance program can help all staff understand their obligations and reduce the risk of breaching their obligations.
Your compliance program is one of the general conduct obligations for credit licensees. To ensure your NCCP compliance you need to test yourself against all your policies regularly, document the results and take action to fix any areas of non-compliance.
The Licensee needs to demonstrate it:
1. Has all the appropriate policies;
2. Has a documented schedule (we recommend quarterly) to test itself against the policies;
3. Documents the testing results; and
4. Takes any necessary actions arising out of the results.
Of course, the above also applies to the obligations around the responsible lending process (file audits). However, we have observed that the industry seems to have forgotten about the other obligations, which are just as important.
With all the noise ASIC is starting to make about enforcement, now is the time to get these practices embedded in your Licensee business.
QED CompliFast is an online compliance monitoring system that Australian credit licensees use to meet their NCCP compliance obligations. With different areas tested quarterly, QED CompliFast ensures adequate testing, documentation and recommended action plans.