In response to last month’s Court of Appeal ruling affecting commission disclosure practices, the National Association of Commercial Finance Brokers (NACFB) has swiftly enhanced its support for Members by issuing revised compliance templates and offering targeted guidance.
The trade association’s proactive approach has included tactical support from the outset and culminated in the revision of five critical documents, now available in the NACFB’s template library. The latest documents are available at no cost to NACFB Members and can be accessed online here.
The late October Court of Appeal ruling in Johnson v FirstRand Bank Limited determined that dealerships owe consumers a duty of impartiality and care in finance agreements, especially regarding commission practices. Now pending Supreme Court referral, the decision challenges existing standards on disclosure and fairness.
These documents, including the Commission Disclosure template, Terms of Business Agreement, Initial Disclosure Document, Status Disclosure Document, and Product Suitability Statement, seek to ensure that broker Members are equipped to meet the latest regulatory standards effectively.
Commenting on the NACFB’s approach in response to the developments, new NACFB CEO Jim Higginbotham said:
“Whilst the Court of Appeal cases centre around a relatively narrow set of distinguishing factors - primarily involving client vulnerability and sophistication within the sub-prime, used car market, and regulated agreements where a vendor also acted as a broker - the impact of this ruling reaches beyond that specific profile.
“This moment serves as a call to all commercial finance brokers to review their processes and ensure they are up to date. Now, more than ever, it’s essential to take stock and lean on your trade body for support. The NACFB is here to help you develop a tailored response relevant to your firm’s unique operations and compliance needs.”
Sarah Cunningham, the NACFB’s new head of compliance, outlined her team’s dedication to providing Members with both resources and hands-on support: “Our team has worked diligently not only to develop these updated templates but also to offer tailored one-on-one support.
“We’re committed to helping our Members interpret these changes through the specific lens of their business activity, structure, and regulatory position. Such tailored support has been invaluable in helping them to better understand and implement the necessary measures more confidently.”
The NACFB encourages Members to leverage these updated templates and reach out to the compliance team for further guidance to ensure alignment with the latest regulatory expectations.
Jim continued: “Our priority is to ensure that Members can adapt to these changes confidently and with minimal disruption. By aligning with interpretations from both the Finance & Leasing Association (FLA) and UK Finance, we’ve worked to establish a consistent approach that allows brokers to continue serving their clients seamlessly. This collaboration is key to keeping the transactional wheels turning, offering brokers practical and clear support at both a conceptual level and in the daily application of compliance requirements.”
