Australian Securities & Investments Commission updates responsible lending guidance to clarify how lenders consider HELP student loan commitments

The Australian Securities & Investments Commission (ASIC) has updated Regulatory Guide 209 Credit licensing: Responsible lending conduct (RG 209) to clarify how the Higher Education Loan Program (HELP), and other student loan commitments, may be taken into account when banks and lenders assess whether a consumer can afford new credit. The revised guidance reflects that HELP debts differ from other debts because required repayments depend on a person’s income. ASIC stressed that the update is limited to the treatment of HELP debts in lending assessments and does not change broader lending policies or responsible lending obligations. The changes follow a request from the Treasurer for ASIC and the Australian Prudential Regulation Authority (APRA) to review lender guidance, and subsequent consultation with industry associations and consumer groups, with ASIC and APRA working to ensure consistent treatment in their respective guidance.