BLA - Finance brokers

Mortgage brokers are included within the definition of finance brokers.

Individuals or corporations engage in finance broking if they:

Negotiate consumer credit for a fee and/or commission;
Act as an intermediary to obtain consumer credit for a fee;
Hold themselves out as being prepared to do either of the above; or,
Are an employee or agent doing any of the above.

When a credit provider charges a client for credit to buy or lease property, goods or services mainly for domestic usage, the client and credit provider enter into a consumer credit contract or a consumer lease within the meaning of the Consumer Credit (Victoria) Code ("consumer credit").

The Consumer Credit (Victoria) Act 1995 regulates individuals and corporations who engage in finance broking. It outlines the:

Required conduct of finance brokers;
Measures to protect consumers; and,
Fees brokers are permitted to charge their clients.

Finance/mortgage brokers, their agents and employees do not need a licence, but they must meet eligibility criteria. If you are disqualified from engaging in finance/mortgage broking, you may apply to the Business Licensing Authority for permission to do so.

Penalties
Ineligible individuals and corporations risk a fine of up to 240 penalty units (one penalty unit = $110.20) when they engage in finance broking. Additionally, individals can be sentenced to up to two years' imprisonment.

Australian Corporations Legislation
If you intend to operate a business through a company, you need to be aware of both the Director's and Company Secretary's responsibilities under the Australian Corporations Legislation. Visit the Australian Securities & Investments Commission website to find out more about the legislation requirements.

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Last Updated: 08/07/2008