The new regime will be implemented in two phases. Legislation to give the Commonwealth responsibility for consumer credit (Phase One) was introduced into Parliament in June 2009 and was passed by the Senate on 26 October 2009. The introduction of legislation to enact the reforms under Phase Two of the National Consumer Credit Action Plan is planned for mid 2010.
Under the National Consumer Credit Protection Bill:
Anyone who engages in certain credit activities will need to register with ASIC between 1 April and 30 June 2010 (inclusive).
Registered credit participants will then have six months to apply for an Australian credit licence, between 1 July 2010 and 31 December 2010.
New entrants to the credit market will have to apply for an ACL from 1 July 2010.
The National Consumer Credit Code will commence on 1 July 2010.
Some responsible lending obligations will commence from 1 July 2010. The requirement not to arrange or provide credit that is unsuitable will apply to:
credit providers (other than Authorised Deposit-taking Institutions (ADIs) and Registered Finance Companies (RFCs)) and intermediaries, including mortgage brokers from 1 July 2010;
ADIs and RFCs from 1 January 2011.
Other responsible lending obligations (including disclosure requirements, such as upfront disclosure of broker fees and charges) will come into effect on 1 January 2011.
Changes or additions to State Code requirements in relation to:
application to credit for residential investment properties;
introduction of debit default notices;
amendments to business purpose declarations;
amendments to default notices; and
new notices in response to application for hardship variations and postponements
will commence from 1 July 2010.
There is an exemption from licensing for point of sale retailers such as car dealerships, stores or retail outlets, where they engage in credit activities by arranging credit or acting as an intermediary through an arrangement with a lender. However, there will be situations where the exemption for point of sale retailers may not be applicable (for example, door to door sales) to minimise the risk of abuse by persons who would otherwise not be regulated by the National Consumer Credit Protection Bill 2009. The Government will examine the issue of regulatory oversight within the next 12 months.
More information about the revised implementation schedule is available from the Treasury website at www.treasury.gov.au/consumercredit.
Getting ready for credit
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