CONSUMER CREDIT PROTECTION AMENDMENT (FEES) BILL 2011

2010-2011

The Parliament of the

Commonwealth of Australia

THE SENATE

Presented and read a first time

Consumer Credit Protection Amendment

(Fees) Bill 2011

No. , 2011

(Senator Xenophon)

A Bill for an Act to amend the National Consumer

Credit Protection Act 2009 in relation to fees

imposed by credit providers, and for related

purposes

i Consumer Credit Protection Amendment (Fees) Bill 2011 No. , 2011

Contents

1 Short

title

...........................................................................................

2 Commencement

.................................................................................

3 Schedule(s)

........................................................................................

Schedule 1--Amendment of the National Consumer Credit

Protection Act 2009

Schedule 2--Amendment of the Banking Act 1959

Consumer Credit Protection Amendment (Fees) Bill 2011 No. , 2011 1

A Bill for an Act to amend the National Consumer

Credit Protection Act 2009 in relation to fees

imposed by credit providers, and for related

purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Consumer Credit Protection

Amendment (Fees) Act 2011.

2 Commencement

(1) Each provision of this Act specified in column 1 of the table

commences, or is taken to have commenced, in accordance with

2 Consumer Credit Protection Amendment (Fees) Bill 2011 No. , 2011

column 2 of the table. Any other statement in column 2 has effect

according to its terms.

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1. Sections 1 to 3

and anything in

this Act not

elsewhere covered

by this table

The day this Act receives the Royal Assent.

2. Schedules 1

and 2

The day after this Act receives the Royal

Assent.

Note:

This table relates only to the provisions of this Act as originally

enacted. It will not be amended to deal with any later amendments of

this Act.

(2) Any information in column 3 of the table is not part of this Act.

Information may be inserted in this column, or information in it

may be edited, in any published version of this Act.

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or

repealed as set out in the applicable items in the Schedule

concerned, and any other item in a Schedule to this Act has effect

according to its terms.

Amendment of the National Consumer Credit Protection Amendment (Fees) Bill 2011

Schedule 1

Consumer Credit Protection Amendment (Fees) Bill 2011 No. , 2011 3

Schedule 1--Amendment of the National

Consumer Credit Protection

Amendment (Fees) Bill 2011

1 Before section 31 of the National Credit Code (in Division 4

of Part 2)

Insert:

30B Credit fees or charges relating to credit contracts

(1) A credit fee or charge payable by a debtor to a credit provider must

be reasonable.

(2) ASIC may, if satisfied on the application of a debtor or guarantor

that a credit fee or charge is not reasonable, apply to the court for

an order annulling or reducing the credit fee or charge and for any

other ancillary or consequential orders.

(3) In determining whether a credit fee or charge is not reasonable,

ASIC must have regard to whether the amount of the credit fee or

charge materially exceeds:

(a) the credit provider's reasonable costs of undertaking the

activity or service to which the credit fee or charge relates; or

(b) the credit provider's average reasonable costs of undertaking

the activity or service to which the credit fee or charge relates

in respect of that class of contract.

(4) In considering an application by ASIC under subsection (2), the

court must have regard to whether the amount of the credit fee or

charge the subject of the application materially exceeds:

(a) the credit provider's reasonable costs of undertaking the

activity or service to which the credit fee or charge relates; or

(b) the credit provider's average reasonable costs of undertaking

the activity or service to which the credit fee or charge relates

in respect of that class of contract.

Schedule 2 Amendment of the Banking Act 1959

4 Consumer Credit Protection Amendment (Fees) Bill 2011 No. , 2011

Schedule 2--Amendment of the Banking Act

1959

1 At the end subsection 9(4)

Add "or the requirements of section 9AF".

2 After section 9

Insert:

9AF Variation of conditions of certain authorities

(1) APRA must, within 30 days of the commencement of this section,

vary the conditions of relevant existing section 9 authorities to give

effect to this section and any new section 9 authority granted after

that commencement to which this section applies must include

conditions that give effect to this section.

(2) The section 9 authority for a bank which has a market share of

more than 10% must prohibit the bank from imposing an early

termination fee in respect of any loan agreement or mortgage

contract entered into by the bank after the commencement of this

section.

(3) If a bank which has a market share of more than 10% has an

interest of 51% or more in a subsidiary which is an ADI, the

section 9 authority for that ADI must prohibit the ADI from

imposing an early termination fee in respect of any loan agreement

or mortgage contract entered into by the ADI after the

commencement of this section.

(4) In this section:

bank means an Australian ADI that is permitted under section 66

of the Banking Act 1959 to assume or use:

(a) the word bank, banker or banking; or

(b) any other word (whether or not in English) that is of like

import to a word referred to in paragraph (a).

early termination fee means any additional charge imposed on a

borrower or mortgagor in any situation in which the borrower or

mortgagor chooses to pay out the loan agreement or mortgage

Commonwealth of Australia Bills

CONSUMER CREDIT PROTECTION AMENDMENT (FEES) BILL 2011