Consumer Credit Reforms - Senate committee amendments and change of dates ... again
Chris Bowen, the Minister for Financial Services and Superannuation and Corporate Law has announced some changes following the recently released Senate Economics Committee Report on the proposed legislation.
The legislative timetable has been changed once more. The new timetable is set out below.
In addition to the changed timetable for the introduction of the reforms, the Government will adopt some of the recommendations of the Senate Economics Committee including:
- the removal of subsection 130(3) from the Credit Bill so that credit providers will have to verify information provided in a preliminary assessment;
- clarifying that consumers have access to remedies without having a formal finding by a court in relation to civil penalty; and
- requiring lenders to provide consumers with reasons for rejecting applications for hardship variations and stays of enforcement.
Other amendments identified in the Minister’s press release include:
- modifying the definition of residential property so that it excludes properties which are not predominantly used for residential purposes;
- clarifying that certain ASIC decisions, particularly regarding enforcement action, are excluded from Administrative Appeals Tribunal review;
- enabling ASIC to issue certain documents in a form prescribed by regulations;
- clarifying that ASIC may exempt a person and all their credit representatives in a single determination;
- increasing flexibility for ASIC to grant exemptions to some parts of the National Credit Code or subject to conditions; and
- allowing for the transfer of information documents, assets or liabilities from a State or Territory to ASIC prior to the commencement of the National Credit Code.
The change of dates will be welcomed by many in the industry.
Please contact Hadyn Oriti should you have any questions or require any assistance.
NATIONAL CONSUMER CREDIT PROTECTION PACKAGE TIMETABLE
| (DETAILS OF DEFERRED COMMENCEMENT) Requirements | As previously announced | Incorporating Senate Committee recommendations (September 2009) |
|---|---|---|
| Requirement for persons engaging in credit activities either to be registered or to hold an Australian credit licence | from 1 January 2010 | 1 July 2010 to 31 December 2010 |
| All registered persons must have applied for a licence | 30 June 2010 | 31 December 2010 |
| All registrations cancelled (therefore all participants must be licensed) | 30 June 2011 | 30 June 2011 |
| Requirement not to arrange or provide credit that is unsuitable – non-ADIs and non-RFCs | 1 January 2010 | 1 July 2010 |
| Requirement not to arrange or provide credit that is unsuitable – ADIs and RFCs | 1 January 2011 | 1 January 2011 |
| Other Responsible Lending Obligations (including disclosure requirements, such as the provision of quotes, credit guides and assessments) | 1 January 2011 | 1 January 2011 |
National Credit Code Deferred enhancements:
|
State enforcement of UCCC until 31 December 2009 ASIC enforcement of National Credit Code from 1 January 2010 Deferred enhancements from 1 July 2010 |
State enforcement of UCCC until 30 June 2010 All NCC requirements commence from 1 July 2010 |
Please call to discuss how these changes may affect your business.