National consumer credit regulation

National Consumer Credit Protection Package
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National Credit Licensing Roadshow (June 2010)
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Previous National Credit Roadshow (February – April 2010)
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In 2008, the Council of Australian Governments agreed that the Commonwealth Government should take over responsibility for the regulation of consumer credit. ASIC will become the national regulator for consumer credit and finance broking, taking over from the states and territories. This means that home loans, personal loans, credit cards, consumer leases, pre-arranged overdrafts and line of credit accounts, among other products and services, will be regulated under Commonwealth legislation and administered by ASIC.

ASIC will continue to make information about the new regulatory framework including the legislation, licensing process, general obligations and the timeframe in which the changes will take effect, available on this website.

Information for consumers and borrowers, including tips on using credit wisely, taking control of debt and what to do if experiencing financial difficulty, can be found at www.fido.gov.au/credit.

National Consumer Credit Protection Package

On Thursday, 25 June 2009, the Hon Chris Bowen MP, Minister for Financial Services, Superannuation and Corporate Law, introduced the National Consumer Credit Protection Bill into Parliament. This followed the release of an exposure draft of the Bill, which provided members of the public with an opportunity to make a submission on the draft Bill.

Minister Bowen announced a number of enhancements to the National Consumer Credit Protection legislation on 17 September 2009. The key change was the commencement of the Consumer Credit Reforms on 1 July 2010. This followed a recommendation by the Senate Economics Committee to give the credit industry more time to make the necessary changes to move to the new regime.

On Monday, 26 October 2009 the Senate passed the National Consumer Credit Protection Bill.

Further details, including a copy of the National Consumer Credit Protection Act, can be found on the Treasury website at www.treasury.gov.au/consumercredit.

Implementation

The program to bring the regulation of consumer credit under the Commonwealth – the National Consumer Credit Action Plan – will be introduced in two phases. The Commonwealth Government will assume responsibility for the Uniform Consumer Credit Code (UCCC) by enacting it as Commonwealth law. The second phase will consider a review of unsolicited credit card limit extension offers, the possible regulation of reverse mortgages and further measures, where necessary, to address unfavourable lending practices.

ASIC and The Treasury, industry representatives and other key stakeholders are working together to implement the changes.

Key elements of Phase One

Enacting the existing state legislation, the UCCC, into Commonwealth legislation.
Establishing a national licensing regime to require providers of consumer credit and credit-related brokering services and advice to obtain a licence from ASIC.
Extending the powers of ASIC to be the national regulator of the new credit framework with enhanced enforcement powers.
Requiring licensees to observe a number of general conduct requirements including responsible lending practices.
Requiring mandatory membership of an external dispute resolution (EDR) body by all providers of consumer credit and credit-related brokering services and advice.
Extending the scope of credit products covered by the UCCC to regulate the provision of consumer mortgages over residential investment properties.
Extending the operation of the Corporations Act to regulate margin lending.

Key elements of Phase Two

Enhancements to specific conduct obligations to stem unfavourable lending practices, such as a review of credit card limit extension offers; and other fringe lending issues as they arise.
Regulation of the provision of credit for small businesses.
Regulation of investment loans other than margin loans and mortgages for residential investment properties.
Reform of mandatory comparison rates and default notices.
Enhancements to the regulation and tailored disclosure of reverse mortgages.
Examination of remaining existing state and territory reform projects.

On 7 July, The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP, released a Green Paper on Phase Two of the COAG National Credit Reforms, which outlines the options for enhancing the new national consumer credit law. More information is available in the media release (085)

More about the timeline for credit licensing

ASIC guidance documents on credit

Registration and licensing

Credit registration has now closed. If you haven't registered, the law requires that you must stop engaging in credit activities until you are granted an Australian credit licence or have become a representative of a licensee.

If you are not registered or don't have an Australian credit licence, you should contact ASIC immediately (email or phone 1300 300 630) to discuss your options.

If you have registered with us, you can continue to engage in credit activities from 1 July 2010 until you complete the licence application process (due by 31 December 2010).

New entrants to the credit market will have to apply for an Australian credit licence from 1 July 2010.

More about licensing

Subscribe to receive ASIC Credit Reform Updates

To receive information from ASIC about the National Consumer Credit Protection reforms subscribe to the ASIC Credit Reform Update.

Subscribers will be provided further information about the registration and licensing requirements and process.

General information about the reform process will also be provided via this service.

Subscribe to the ASIC Credit Reform Update.

More information

ASIC will continue to provide information in relation to the implementation of the national regulation of consumer credit via this website and other communication channels.

Useful website links and other resources

Background to ASIC's credit jurisdiction

Debt collection

Visit our Financial services homepage

Career opportunities

The transfer of credit regulation from the states and territories to ASIC presents a number of new career opportunities. The Careers page on the ASIC website will publish these new career opportunities: www.careers.asic.gov.au

Contact ASIC

phone: 1300 300 630
email: infoline@asic.gov.au
website: www.asic.gov.au/credit

ASIC Website: Printed 09/03/2010

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