Commonwealth Numbered Acts Commonwealth Numbered Acts
National Consumer Credit Protection Act 2009
1 Subsection 5(1)
Insert:
"short-term credit contract" : a credit contract is a short-term credit contract if:
(a) the contract is not a continuing credit contract; and
(b) the credit provider under the contract is not an ADI; and
(c) the credit limit of the contract is $2,000 (or such other amount as is prescribed by the regulations) or less; and
(d) the term of the contract is 15 days or less; and
(e) the contract meets any other requirements prescribed by the regulations.
2 Subsection 5(1)
Insert:
"small amount credit contract" : a credit contract is a small amount credit contract if:
(a) the contract is not a continuing credit contract; and
(b) the credit provider under the contract is not an ADI; and
(c) the credit limit of the contract is $2,000 (or such other amount as is prescribed by the regulations) or less; and
(d) the term of the contract is at least 16 days but not longer than 1 year (or such other number of years as is prescribed by the regulations); and
(e) the debtor's obligations under the contract are not, and will not be, secured; and
(f) the contract meets any other requirements prescribed by the regulations.
3 At the end of section 111
Add:
Division 7 prohibits a licensee from providing credit assistance to a consumer in relation to short-term credit contracts. It also imposes requirements on a licensee who makes representations about providing credit assistance in relation to small amount credit contracts.
4 After subsection 117(1)
Insert:
(1A) If:
(a) the credit contract is a small amount credit contract; and
(b) the consumer holds (whether alone or jointly with another person) an account with an ADI into which income payable to the consumer is credited;
the licensee must, in verifying the consumer's financial situation for the purposes of paragraph 115(1)(d), obtain and consider account statements that cover at least the immediately preceding period of 90 days.
(1B) Subsection (1A) does not limit paragraph (1)(c) of this section.
5 After subsection 118(3)
Insert:
(3A) If the contract is a small amount credit contract (the relevant contract ) and either of the following apply:
(a) at the time of the preliminary assessment:
(i) the consumer is a debtor under another small amount credit contract; and
(ii) the consumer is in default in payment of an amount under that other contract;
(b) in the 90-day period before the time of the preliminary assessment, the consumer has been a debtor under 2 or more other small amount credit contracts;
then, for the purposes of paragraph (2)(a), it is presumed that the consumer could only comply with the consumer's financial obligations under the relevant contract with substantial hardship, unless the contrary is proved.
6 After subsection 123(3)
Insert:
(3A) If the contract is a small amount credit contract (the relevant contract ) and either of the following apply:
(a) at the time the licensee provides the credit assistance:
(i) the consumer is a debtor under another small amount credit contract; and
(ii) the consumer is in default in payment of an amount under that other contract;
(b) in the 90-day period before the time the licensee provides the credit assistance, the consumer has been a debtor under 2 or more other small amount credit contracts;
then, for the purposes of paragraph (2)(a), it is presumed that the consumer could only comply with the consumer's financial obligations under the relevant contract with substantial hardship, unless the contrary is proved.
7 At the end of Part 3-1
Add:
Division 7 -- Special rules for short-term and small amount credit contracts
124A Prohibition on providing credit assistance in relation to short-term credit contracts
Prohibition
(1) A licensee must not provide credit assistance to a consumer by:
(a) suggesting that the consumer apply, or assisting the consumer to apply, for a short-term credit contract; or
(b) suggesting that the consumer apply, or assisting the consumer to apply, for an increase to the credit limit of a particular short-term credit contract with a particular credit provider.
Civil penalty: 2,000 penalty units.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
Requirement
(1) If a licensee represents that the licensee provides, or is able to provide, credit assistance to consumers in relation to small amount credit contracts:
(a) the licensee must display information in accordance with the regulations at a place prescribed by the regulations; and
(b) the licensee must ensure that any website of the licensee complies with the requirements prescribed by the regulations.
Civil penalty: 2,000 penalty units.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
8 After subsection 130(1)
Insert:
(1A) If:
(a) the credit contract is a small amount credit contract; and
(b) the consumer holds (whether alone or jointly with another person) an account with an ADI into which income payable to the consumer is credited;
the licensee must, in verifying the consumer's financial situation for the purposes of paragraph 128(d), obtain and consider account statements that cover at least the immediately preceding period of 90 days.
(1B) Subsection (1A) does not limit paragraph (1)(c) of this section.
9 At the end of subsection 131(1) (before the note)
Add:
Civil penalty: 2,000 penalty units.
10 Subsection 131(2) (penalty)
Repeal the penalty.
11 After subsection 131(3)
Insert:
(3A) If the contract is a small amount credit contract (the relevant contract ) and either of the following apply:
(a) at the time of the assessment:
(i) the consumer is a debtor under another small amount credit contract; and
(ii) the consumer is in default in payment of an amount under that other contract;
(b) in the 90-day period before the time of the assessment, the consumer has been a debtor under 2 or more other small amount credit contracts;
then, for the purposes of paragraph (2)(a), it is presumed that the consumer could only comply with the consumer's financial obligations under the relevant contract with substantial hardship, unless the contrary is proved.
12 After subsection 133(3)
Insert:
(3A) If the contract is a small amount credit contract (the relevant contract ) and either of the following apply:
(a) at the time it is entered or the credit limit is increased:
(i) the consumer is a debtor under another small amount credit contract; and
(ii) the consumer is in default in payment of an amount under that other contract;
(b) in the 90-day period before the time it is entered or the credit limit is increased, the consumer has been a debtor under 2 or more other small amount credit contracts;
then, for the purposes of paragraph (2)(a), it is presumed that the consumer could only comply with the consumer's financial obligations under the relevant contract with substantial hardship, unless the contrary is proved.
13 After Part 3-2B
Insert:
This Part has rules that apply to licensees who are, or are to be, credit providers under short-term credit contracts and small amount credit contracts. It applies in addition to the general rules in Part 3-2.
Division 2 prohibits a licensee from entering into, or increasing the credit limit of, short-term credit contracts. It also imposes requirements on a licensee who makes representations about entering into small amount credit contracts and prohibits a licensee from entering into, or offering to enter into, small amount credit contracts in certain circumstances.
Division 2 -- Short-term and small amount credit contracts
133CA Prohibition on entering, or increasing the credit limit of, short-term credit contracts
Prohibition
(1) A licensee must not:
(a) enter a short-term credit contract with a consumer who will be the debtor under the contract; or
(b) increase the credit limit of a short-term credit contract with a consumer who is the debtor under the contract.
Civil penalty: 2,000 penalty units.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
Requirement
(1) If a licensee represents that the licensee enters into, or is able to enter into, small amount credit contracts with consumers under which the licensee would be the credit provider:
(a) the licensee must display information in accordance with the regulations at a place prescribed by the regulations; and
(b) the licensee must ensure that any website of the licensee complies with the requirements prescribed by the regulations.
Civil penalty: 2,000 penalty units.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
Requirement
(1) A licensee must not enter into, or offer to enter into, a small amount credit contract with a consumer who will be the debtor under the contract if:
(a) the consumer is included in a class of consumers prescribed by the regulations; and
(b) the repayments that would be required under the contract would not meet the requirements prescribed by the regulations.
Civil penalty: 2,000 penalty units.
Note: For example, the regulations may provide that the amount of a repayment must not exceed a specified percentage of the consumer's income.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 50 penalty units.
14 Paragraph 180(1)(b)
Repeal the paragraph, substitute:
(b) the engaging in the activity contravenes any of the following:
(i) section 29 (which requires the holding of a licence);
(ii) section 124A (which prohibits the provision of credit assistance in relation to short-term credit contracts);
(iii) section 133CA (which prohibits credit providers from entering into short-term credit contracts etc.);
15 After section 335
Insert:
335A Review relating to small amount credit contracts
(1) The Minister must cause an independent review of the following matters to be undertaken as soon as practicable after 1 July 2015:
(a) the operation of the following provisions:
(i) subsections 117(1A), 118(3A), 123(3A), 130(1A), 131(3A) and 133(3A) of this Act;
(ii) Division 7 of Part 3-1 of this Act;
(iii) Part 3-2C of this Act;
(b) whether a national database of small amount credit contracts should be established;
(c) whether any additional provisions relating to small amount credit contracts should be included in this Act and/or the National Credit Code.
(2) The review must be undertaken by 3 persons who, in the Minister's opinion, possess appropriate qualifications to undertake the review.
(3) The persons who undertake the review must give the Minister a written report of the review.
(4) The Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sitting days of that House after the day on which the report is given to the Minister.
(5) The report is not a legislative instrument.