Consumer Credit Legislation Amendment (Enhancements) Act 2012 (130 of 2012)

Schedule 3   Short-term and small amount credit contracts

National Consumer Credit Protection Act 2009

13   After Part 3-2B

Insert:

Part 3-2C - Licensees that are credit providers under credit contracts: additional rules relating to short-term and small amount credit contracts

Division 1 - Introduction

133C Guide to this Part

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.

133CB Licensee who makes representations about small amount credit contracts must display information etc.

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.

133CC Licensee must not enter into a small amount credit contract if the repayments do not meet the prescribed requirements

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.