Best Interest Duty Policy (BID)

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YUNS Pty Ltd (“YUNS”) BID covers any loan where the credit is provided wholly or predominantly for personal, domestics or household purposes, or to purchase, renovate or improve residential property for investment purposes, or to refinance credit previously provided for this purpose, including asset finance to consumers, excluding any business purpose loans.

The best interests’ obligations will apply to “mortgage brokers”, a term which is now defined in the National Consumer Credit Protection Act 2009 (Cth) (Credit Act) as:

1. A credit licensee or credit representative who carries on a business of providing credit assistance in relation to credit contracts offered by more than one credit provider that are secured by mortgages over residential property,

2. And does not perform the obligations or exercise the rights of a credit provider in relation to the majority of those credit contracts.

Key BID Regulations

YUNS must comply with the following:

1. act in the best interests of consumers in relation to credit assistance and credit or loan contracts;

2. Where there is a conflict of interest, give priority to consumers in providing credit assistance in relation to credit or loan contracts;

3. manage conflicts of interest. When conflict exists, such conflict must be disclosed to customers and priority must be given to their needs.

 BID Expectations 

YUNS is expected to:

1. Comply with the Conflict Priority Rule (CPR)

2. Resolve conflicts in the interest of the consumers, demonstrated by disclosure and articulation of consumers benefits

3. Demonstrate transparency in providing information and recommendation to consumers

4. Demonstrate knowledge, skills, and qualifications with the aim to deliver outstanding results for consumers

5. Respect and maintain privacy

6. Support communities and be environmentally responsible
 

Required processes to Meet BID:

1. Gathering Information.

2. Conducting Individual Assessments

3. Disclosing, presenting information and making recommendations

4. Educating and equipping consumers to make informed decisions (includes making recommendations or assisting a consumer to refinance an existing loan)
 

 Recommendations to consumers should identify and consider the following:

1. How each product will meet the consumer’s needs, objectives, priorities and preferences;

2. Whether (and why) suggesting the consumer take out that product, as part of a package, would be in the consumer’s best interests; and

3. Compare packaged products to standalone home loans without other packaged credit products such as credit card.

Promotions

Promotional offers include:

1. Cash rebate or points rewards;

2. Waived or reduced fees; or

3. Discounted interest rate (cost/savings if quantifiable must also need to be considered as part of cost analysis).

Refinance Comparisons

Comparisons include:

1. Cost Benefits analysis including total costs over the new loan term

2. Detailed benefits from refinancing

3. If benefits are not quantifiable, the rationale must be clearly explained to consumers and justified