National Consumer Credit Protection Act 2009

CHAPTER 2 - LICENSING OF PERSONS WHO ENGAGE IN CREDIT ACTIVITIES  

PART 2-2 - AUSTRALIAN CREDIT LICENCES  

Division 5 - Obligations of licensees  

Subdivision B - Providing information and assistance to ASIC  

SECTION 50A   WHAT ARE REPORTABLE SITUATIONS?  

50A(1)    
There is a reportable situation in relation to a licensee if one of the following paragraphs is satisfied:

(a)    the licensee or a representative of the licensee has breached a core obligation and the breach is significant;

(b)    the licensee or a representative of the licensee is no longer able to comply with a core obligation and the breach, if it occurs, will be significant;

(c)    the licensee or a representative of the licensee conducts an investigation into whether there is a reportable situation of the kind mentioned in paragraph (a) or (b) and the investigation continues for more than 30 days;

(d)    an investigation described in paragraph (c) discloses that there is no reportable situation of the kind mentioned in paragraph (a) or (b) .

50A(2)    
There is also a reportable situation in relation to a licensee if:

(a)    in the course of engaging in a credit activity, the licensee or a representative of the licensee has engaged in conduct constituting gross negligence; or

(b)    the licensee or a representative of the licensee has committed serious fraud; or

(c)    any other circumstances prescribed by the regulations for the purposes of this paragraph exist.

50A(3)    
Each of the following is a core obligation :

(a)    an obligation under section 47 , other than the obligation under paragraph 47(1)(d) ;

(b)    the obligation under paragraph 47(1)(d) , so far as it relates to this Act, the Transitional Act and Division 2 of Part 2 of the ASIC Act and regulations made for the purpose of that Division;

(c)    

the obligation under paragraph 47(1)(d) , so far as it relates to Commonwealth legislation that is:

(i) covered by paragraph (d) of the definition of credit legislation in subsection 5(1) ; and

(ii) specified in regulations made for the purposes of this subparagraph;

(d)    

an obligation of a representative of the licensee under this Act, the Transitional Act, Division 2 of Part 2 of the ASIC Act or regulations made for the purpose of that Division.

50A(4)    
For the purposes of this section, a breach of a core obligation is taken to be significant if:

(a)    the breach is constituted by the commission of an offence under any law and the commission of the offence is punishable on conviction by a penalty that may include imprisonment for a maximum period of:

(i) if the offence involves dishonesty - 3 months or more; or

(ii) in any other case - 12 months or more; or

(b)    the breach is constituted by a contravention of a civil penalty provision under any law, other than a civil penalty provision prescribed by the regulations for the purposes of this paragraph; or

(c)    the breach is constituted by a contravention of a key requirement (as defined for the purposes of the National Credit Code), other than a key requirement prescribed by the regulations for the purposes of this paragraph; or

(d)    the breach is constituted by a contravention of subsection 12DA(1) of the ASIC Act (misleading or deceptive conduct in relation to a financial service); or

(e)    the breach results, or is likely to result, in material loss or damage to a credit activity client of the licensee; or

(f)    any other circumstances prescribed by the regulations for the purposes of this paragraph exist.

50A(5)    
Otherwise, for the purposes of this section, a breach of a core obligation is significant having regard to the following:

(a)    the number or frequency of similar breaches;

(b)    the impact of the breach on the licensee ' s ability to engage in credit activities covered by the licence;

(c)    the extent to which the breach indicates that the licensee ' s arrangements to ensure compliance with those obligations are inadequate;

(d)    any other matters prescribed by regulations made for the purposes of this paragraph.

50A(5A)    
Regulations for the purposes of paragraph (4)(b) may prescribe a civil penalty provision to the extent that it relates to the following:

(a)    contraventions of specified provisions;

(b)    specified matters.

50A(6)    
For the purposes of this section, a person is a credit activity client of a licensee if the person is a consumer who:

(a)    is a party to a credit contract, or will be a party to a proposed credit contract, in relation to which the licensee, or a representative of the licensee, performs the obligations, or exercises the rights, of a credit provider; or

(b)    is a person to whom the licensee, or a representative of the licensee, provides a credit service; or

(c)    is a party to a consumer lease, or will be a party to a proposed consumer lease, in relation to which the licensee, or a representative of the licensee, performs the obligations, or exercises the rights, of a lessor; or

(d)    is a mortgagor under a mortgage, or will be the mortgagor under a proposed mortgage, in relation to which the licensee, or a representative of the licensee, performs the obligations, or exercises the rights of a mortgagee; or

(e)    is the guarantor under a guarantee, or will be the guarantor under a proposed guarantee, in relation to which the licensee, or a representative of the licensee, performs the obligations, or exercises the rights, of a beneficiary under the guarantee; or

(f)    is a person in relation to whom the licensee, or a representative of the licensee, engages in a prescribed activity mentioned in item 6 of the table in subsection 6(1).