Identify and Interpret Compliance Requirements

Certificate IV in Finance and Mortgage Broking
Assessment Task
FNS40815
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Assessment
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Task Assessments Total
Mark
Pass
Mark
Actual
Mark
1 Identify and Interpret Compliance Requirements 27 19
2 Deliver and Monitor a Service to Customers 39 27
3 Contribute to OHS Hazard Identification & Risk Assessment 41 29
4 Manage Personal Work Priorities and Professional
Development
24 17
5 Develop and Nurture Relationships with Clients, Other
Professionals and Third Party Referrers
17 12
6 Promoting the Effective Use of Credit 15 10
7 Prepare a Loan Application on Behalf of Mortgage Broking
Clients
64 45
8 Steps Taken by the Credit Provider 23 16
Total 250 175
Assessor’s Initials: ____________________
Assessment Date: ____________________

Introduction
Objective The objective of this Assessment Task is to
demonstrate that you have the skills and knowle
required to conduct a client relationship and com
with statutory, industry and organization complia
requirements.
Elements to be assessed To achieve this objective, you will need to demo
your ability to:
The assessment tasks in this assessment will a
to demonstrate your knowledge and skills in re
these elements.
Assessment process Start by:
1. Reading the Assessment Task.
2. Type your answers to the assessment ta
this template document (hand-written answers
accepted)
3. Submit your completed document by up
it on the ‘Ready for Assessment’ a
www.CPDplus.com
Don’t forget to keep a copy and retain it for 12 month
Need help? If you have any questions or would like to request a
copy of this assessment task, please email the Ment
Support Team at
Statement of Completion Upon successful completion of this assessment
will be awarded the Statement of Completion for
FNS40811 Certificate 4 in Finance and Mortgag
Broking.

Task 1: Identify and Interpret Compliance Requirements
1. Identify
compliance
requirement
s
Mortgage brokers face important compliance requirements, the
foremost among them being the reasonable lending provisions of the
NCCP Act. The penalties for non-compliance include loss of license (for
businesses) and removal from the industry (for individuals). If fraud is
involved there may also be the criminal penalties of fines and / or
imprisonment.
Compliance requirements are not static. It is therefore important to stay
up to date with them.
Mortgage brokers also need to keep up-to-date with the actions of the
regulatory authorities such as APRA and the Reserve Bank. Their
actions may not amount to direct regulation, but through their effects on
interest rates and bank lending these authorities can have a very direct
impact on the business mortgage brokers are able to do.
(a) A key requirement of the responsible lending obligations is the ‘unsuitability test.’ What
must a mortgage broker do to comply with the unsuitability test?
No Mark
1. Conduct reasonable and appropriate enquiries regarding borrower’s key
requirements, necessities and targets
/1
2. Conduct reasonable and appropriate enquiries regarding borrower’s current
financial positions
/1
3. Perform reasonable and appropriate measures to verify and examine
financial position
/1
(b) List the sorts of items a client’s requirements and objectives could include (as indicated by ASIC).
Mark
 Required amount of loan, or highest sum amount wanted.
 Specific duration or time-frame for which loan is acquired.
 The intent and advantage sought and that the customer requires specific
product characteristics or versatility, and recognises the expenses of these
characteristics and any added risks.
/2
(c) Leading credit providers and other financial organisations have code of ethics, sometime called codes of
conduct. Select one of them and summarise it by itemising its main principles.
Mark
False And Mislead Conduct–The Australian Consumer Law (ACL) restricts
false or fraudulent conduct and fraudulent claims by companies in business or
trade. Tribunal can enforce monetary punishments, issue court orders to avoid
continuing or repeating the forbidden conduct, or order that certain actions be
/4

undertaken such as cancelling agreements and granting damages. Offense
also coincides with criminal code violations and penalties and prison
sentences can be levied as well.
Sub-total /9
Continued
(d) In point form, list the key information that the NCCP Act requires to be contained in a Credit Guide.
Mark
A credit guide required to be in written form and must specify:
 Name of the licensee, his contacts information along with Australian-
credit licence no.
 Details about fees-payable as well as charges-payable by client.
 Details about commissions which is receivable from the moneylender.
 Names of 6 prime licensees.
 Information regarding the processing of complaints, along with contact
information regarding internally and externally dispute settlement
procedures.
 Details regarding the current obligations of the applicant to provide, after
request, written copy of unsuitable evaluation.
 Presenting credit guidelines should seem like a formal requirements but
it is a way to introduce business to the consumer and explain what it can
do in a positive way. however it also provides an occasion to explain
certain company characteristics like the variety of services offered and
the processes for addressing grievances that the organisation is
expected to have.
/3
(e) It is important to keep up to date with compliance requirements so that the required changes can be made
to organization procedures and product offerings. Suggest three sources that you can use.
Mark
1) First one is Professional associations bodies like Finance Brokers
Association of Australia (FBAA) and Mortgage and Finance Association
of Australia (MFAA), as well as communicate its members of alteration in
any requirement prior to happen.
/3

2) Secondly codes of these professional associations regarding practice
may be utilised as effective guide line for compliance's requirements.
3) Lastly, bigger mortgage-broking entities normally employ compliance
officers as they aid practitioners to comply with relevant standards.
(f) Explain the requirement for Australian Credit Licensees to keep a training register.
Mark
ASIC entails a corporation to document conformance policies, while it
recognizes that verification levels will differ from comprehensive policy and
processes handbooks in bigger organizations to check-lists in smaller entities. It
is enforced and sustained once a conformance structure has been formed.
Throughout this phase, training does have an essential function but it's not
sufficient in its own. Compliance and moral behaviors must become a prevailing
organizational value.
/2
(g) Explain APRA’s current attitude towards bank lending for investment properties.
Mark
The Australian Prudential Regulation Authority (APRA) has instituted restrictions
which have affected investment and borrowing. The banks adapted to
amendments in APRA by adjusting serviceability conditions on investor
mortgages; rendering it harder for the investors to access finance. Lending
ability has also been limited, lending rates have increased and mortgage
payments are levied at an even greater rate on outstanding debt.
/2
Sub-total /
10
Continued

Task 1: Identify and Interpret Compliance Requirements Continued
1.2
Interpret
, analyse
and
prioritis
e
identifie
d
complia
nce
require
ments
Some of the compliance requirements are difficult to meet. Unfortunately,
also there have been some ‘rogue’ mortgage brokers who have failed to
comply – to the disadvantage of their clients.
The finance planning industry has been plagued by non-compliance in the
largest planning groups, with the image of the industry being substantially
tarnished as a result. It may not suffer greatly because of the absence of an
alternative source of financial advice.
This is not so with mortgage brokers. They are just establishing their
reputation and consumers always have alternative of going to the lenders
directly.
(a) Select three tasks you perform on a regular basis that are subject to compliance
requirements.
No Mark
1. Search/Find out lender /1
2. Completion of loan application effectively /1
3. Send the loan request application to banking institution or other lender, and
waiting until it is accepted by them.
/1
(b) Identify the compliance requirements that are relevant to the three tasks selected,
indicating the name of the relevant legislation, regulation or code of conduct.
No
1. The National Consumer Credit Protection Act 2009 /1
2. ASIC /1
3. Australian Consumer Law /1
(c) How does your organisation monitor your compliance?
Mark
Enacting audits and control of enforcement areas and practices is both integral
business feature and requirement of ASIC regulations. Only other way of ensuring
systems work would be to inspect it and evaluate the findings, performing periodic
and ongoing analyzes and assessments of discrepancies.
/2

Sub-total /8
Total /27
Task 2: Deliver and Monitor a Service to Customers
2.
Identify
custome
r needs
The relationship with a client is generally described as beginning with the
establishment of empathy. In other words, it is first necessary for a
mortgage broker to establish that he / she is truly interested in the client and
the client’s needs. It is only after that that the mortgage broker has
established the right to interview a client.
(a) Use the internet or any other source to find a definition of empathy.
Mark
The capacity to communicate the emotions or perceptions of another by thinking
how it would be in the scenario of that individual.
/1
(b) List three open-ended questions that assist in developing empathy with a client? How
do such questions indicate empathy?
No. Mark
 What is going on?
 How is the business?
 What makes you believe it's perhaps time for something new?
/2
The open ended question offers information regards to need, want of an
individual and every mortgage broker should have this information. Herein,
underneath some open ended questions are mentioned which are as
follows:
/1
(c) List and explain the steps involved in an ‘active listening approach’.
Mark
In the aspect of active listening approach, different steps are included and some of
them are mentioned underneath:
 Ask questions- In this step, need and want of clients are find out so
/1

that accordingly next steps can be taken out.
 Go back- Restate what the customer stated about his or her desires
to be sure that the pertinent details were heard and understood, and
allow the presenter to continue. The views and emotions of the
customer could then be used as a reference to further queries.
/1
 Summarise- In the end make assure that both parties are agreed on
terms and conditions.
/1
(d) How is client service commonly monitored in your organisation? What are the two
possible outcomes?
No. Mark
1. Institutions will benefit from customer interactions by tracking consistency
through multiple channels, resulting in better decisions, operation, and
procedures. Tracking, assessing and controlling efficiency and level of
service must remain a target, but automation of "client's voice" throughout
multiple channels is just as critical.
/1
2. Through taking the view that value control is a systemic mechanism instead
of a tactical one, companies will begin to see user experience enhanced and
thus consumers are greatest champions.
/2
Sub-total /10
Continued
Task 2: Deliver and Monitor a Service to Customers Continued
2.1 Deliver
a service to
customers
In a survey on the reasons for referrals conducted by David Maister, only
10% were due to the quality of technical work. The remaining 90% of
referrals were due to the quality of service.
This indicates that the key to maintaining client relationships and gaining
referrals is the provision of outstanding service. This has been described by
Maister as ‘over-servicing’.
(a) Describe three ways in which a mortgage broking organisation can attempt to
‘overservice’ clients?
No. Mark
1. Investment in company and automation- The task tracking systems, metrics /1