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National Consumer Credit Protection Package

Draft Regulations

The Minister for Financial Services, Superannuation and Corporate Law, the Hon Chris Bowen MP, today released draft Regulations and explanatory material for the Rudd Government's National Consumer Credit Protection Package for public comment.

'The Credit Package introduces a consumer credit regime which is modernised for the requirements of industry and with strengthened protection for consumers," Mr Bowen said.

"These draft Regulations clarify important elements of this Credit Package, including licensing arrangements, the nature of exemptions for debt collectors and point of sale retailers, where legal proceedings will commence, transitional matters and fees payable by holders of an Australian credit licence.'

The draft Regulations include:

  • the draft National Consumer Credit Protection Regulations 2009 (including the National Credit Code Regulations);
  • the draft National Consumer Credit Protection (Transitional and Consequential Provisions) Regulations 2009;
  • the draft National Consumer Credit Protection (Fees) Regulations 2009; and
  • the draft Electronic Transactions Amendment Regulations 2009.

Further details are in the Attachment.

These regulations will be available for public comment between 14 August and 9 September.

The package of regulations and related explanatory material can be found and downloaded at www.treasury.gov.au/consumercredit.

Comments on the draft regulations can be provided by email to This e-mail address is being protected from spambots. You need JavaScript enabled to view it by 9 September 2009.


Attachment

Summary of Draft Regulations

National Consumer Credit Protection Regulations 2009 (including National Credit Code Regulations)

Key features of these regulations are:

  • Exemptions from licensing for a 12 month period for debt collectors, where they hold a licence under a law of a State or Territory.
  • Exemptions from licensing for point of sale retailers such as car dealerships, stores or retail outlets, where they engage in credit activities by arranging credit or acting as an intermediary through an arrangement with a lender.
  • Situations where the exemption for point of sale retailers may not be applicable (for example, door to door sales) to minimise the risk of abuse by persons who would otherwise not be regulated by the National Consumer Credit Protection Bill 2009.
  • The National Credit Code regulations replicate the State based regulations and include exemptions and prescribing disclosure requirements, for example in relation to business purpose declarations, interest rates, information to be included in notices, etc.
  • Additional regulations include:
    • establishing the arrangements for where legal proceedings must be commenced;
    • supporting the infringement notice scheme to be administered by the Australian Securities and Investments Commission (ASIC);
    • prescribing the details which ASIC must include in the credit registers;
    • prescribing the forms to be used by ASIC when issuing a written notice or summons to a person;
    • specifying to whom ASIC may provide a report of an investigation;
    • evidencing of authority for ASIC staff and ASIC members; and
    • prescribing allowances and expenses that can be paid to a person who appears at an ASIC hearing.

National Consumer Credit Protection (Transitional and Consequential Provisions) Regulations 2009

  • Key features of these regulations are to:
    • provide for more detailed regulation of persons registered to engage in credit activities (consistently with regulations made in respect of holders of an Australian credit licence);
    • provide that provisions about the sale of land or goods by instalments do not apply to the provision of credit made before 29 May 2009 (to maintain consistency with recent amendments by the States);
    • enable a state or territory "Government Consumer Agency" as a party to an existing court proceeding, to act as an agent of ASIC;
    • enable ASIC to undertake extensive industry consultation, and working closely and cooperatively with stakeholders to develop guidance material; and
    • provide for a transfer agreement (about the transfer of assets or liabilities) may be entered into between ASIC and a State or Territory.

National Consumer Credit Protection (Fees) Regulations 2009

  • These regulations prescribe fees for certain matters under the Credit Package. These fees will help offset the cost of implementing the new regime. Items prescribed by these regulations include:
    • licensing and annual compliance fees based on the size of the applicant or Australian credit license holder;
    • no fees for a range of basic matters that assist ASIC to maintain the integrity of their systems; and
    • additional charges for late lodgment and non-electronic lodgment.
  • This fee structure has been designed to promote fairness, certainty and simplicity, whilst also supporting compliance with the Credit Bill.

Electronic Transactions Amendment Regulations 2009

  • These draft regulations will serve to maintain the exemptions from electronic transactions legislation under the credit regulation scheme administered by the States and Territories.

Remaining Regulations

Additional regulations are currently being drafted and it is intended to release them by 31 August 2009 for public consultation.

  • These regulations will cover the application of the Credit Bill to lenders under credit contracts or consumer leases in force as at the date the Commonwealth law commences and calculation and payment of interest for residential for residential investment properties.
  • These regulations will be available from the www.treasury.gov.au/consumercredit website. You can subscribe to the website in order to receive an alert when these remaining regulations are available.

Further Consultation

Treasury will also be consulting with industry and consumer groups on the responsible lending conduct obligations relating to disclosure requirements before draft regulations are released.

 

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