The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP today announced a number of enhancements to the National Consumer Credit Protection legislation.
The key change will enable the commencement of the consumer credit reforms to be deferred by six months to 1 July 2010. This follows a recommendation by the Senate Economics Committee.
"The Rudd Government will defer commencement of the National Consumer Credit Code by six months to give the credit industry more time to make the necessary changes to move to the new regime," Mr Bowen said.
"This package of reforms will create a single, nationally-consistent regime for consumer credit regulation.
"Importantly, the Government's amendments will further enhance the credit hardship provisions, by requiring lenders to provide consumers with reasons for rejecting applications for hardship variation.
"The start date for the new responsible lending obligations on Authorised Deposit-taking Institutions (ADIs) and Registered Financial Corporations (RFCs) will remain 1 January 2011."
The Government is moving amendments that directly address the recommendations of the Senate Economics Committee including:
- Recommendation 6 – the Removal of subsection 130(3) from the Credit Bill so that credit providers will have to verify information provided in a preliminary assessment;
- Recommendation 8 – To clarify that consumers have access to remedies without having a formal finding by a court in relation to civil penalty; and
- Recommendation 11 – To require lenders to provide consumers with reasons for rejecting applications for hardship variations and stays of enforcement.
Other amendments 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.
17 September 2009