Treasury Laws Amendment (Banking Measures No. 1) Act 2018 (9 of 2018)

Schedule 5   Credit card reforms

Part 2   Credit limits

Division 2   Credit limit reductions

National Consumer Credit Protection Act 2009

18   At the end of Division 4 of Part 3-2B

Add:

133BF Credit provider not to enter into credit card contract unless it allows credit limit to be reduced

Requirement

(1) A licensee must not enter into, or offer to enter into, a credit card contract under which the licensee would be the credit provider, if the consumer who would be the debtor under the contract would not have a credit limit reduction entitlement 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.

Meaning of credit limit reduction entitlement

(3) A consumer who is the debtor under a credit card contract has a credit limit reduction entitlement under the contract if:

(a) for a contract that does not provide for a minimum credit limit - the consumer is entitled under the contract to reduce the credit limit of the contract to any amount (including nil); or

(b) for a contract that provides for a minimum credit limit - the consumer is entitled under the contract to reduce the credit limit of the contract to any amount that equals, or exceeds, the minimum credit limit.

133BFA Credit provider to provide online capacity to request reduction of credit limit

When this section applies

(1) This section applies if a consumer who is the debtor under a credit card contract has a credit limit reduction entitlement under the contract on a day (the online reduction day ).

Requirement

(2) The licensee who is the credit provider under the credit card contract must establish and maintain a website that satisfies all of the following paragraphs:

(a) the website tells the consumer that the consumer may use the website to request a reduction in the consumer's credit limit;

(b) the website:

(i) tells the consumer what information the consumer will need to enter in order to request a reduction in the consumer's credit limit; and

(ii) provides the consumer with instructions on how to request a reduction in the consumer's credit limit;

(c) if the consumer enters the information and follows those instructions, the consumer can use the website to request a reduction in the consumer's credit limit;

(d) the website is available on the online reduction day.

Civil penalty: 2,000 penalty units.

Defence

(3) For the purposes of subsection (2), it is a defence if the website is reasonably unavailable on the online reduction day.

133BFB Credit provider not to suggest the consumer not reduce the credit limit

When this section applies

(1) This section applies if:

(a) a consumer who is the debtor under a credit card contract has a credit limit reduction entitlement under the contract; and

(b) the consumer has requested to exercise the entitlement by reducing the credit limit of the contract.

Requirement

(2) The licensee who is the credit provider under the credit card contract must not do any of the following:

(a) suggest that the consumer apply for an increase to the credit limit of the contract;

(b) suggest that the consumer not reduce the credit limit of the contract;

(c) if the consumer's request is to reduce the credit limit of the contract by a specified amount - suggest that the consumer instead reduce the credit limit by a smaller amount.

Civil penalty: 2,000 penalty units.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (2); and

(b) the person engages in conduct; and

(c) the conduct contravenes the requirement.

Criminal penalty: 50 penalty units.

133BFC Credit provider to give effect to request to reduce credit limit

When this section applies

(1) This section applies if:

(a) a consumer who is the debtor under a credit card contract has a credit limit reduction entitlement under the contract; and

(b) the consumer has requested to exercise the entitlement by reducing the credit limit of the contract.

Requirement

(2) The licensee who is the credit provider under the credit card contract must take reasonable steps to ensure that the request is given effect toas soon as practicable.

Civil penalty: 2,000 penalty units.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement under subsection (2); and

(b) the person engages in conduct; and

(c) the conduct contravenes the requirement.

Criminal penalty: 50 penalty units.