NATIONAL CONSUMER CREDIT PROTECTION AMENDMENT (SUPPORTING ECONOMIC RECOVERY) BILL 2020

2019-2020

The Parliament of the

Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

National Consumer Credit Protection

Amendment (Supporting Economic

Recovery) Bill 2020

No. , 2020

(Treasury)

A Bill for an Act to amend the law relating to

consumer credit and consumer leases, and for

related purposes

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

Contents

Short title ........................................................................................... 1

Commencement ................................................................................. 1

Schedules ........................................................................................... 2

Schedule 1--New regulatory framework for provision of

consumer credit

Part 1--Main amendments

National Consumer Credit Protection Act 2009

Part 2--Related amendments

Age Discrimination Act 2004

Part 3--Amendments relating to best interests obligations

National Consumer Credit Protection Act 2009

Schedule 2--Small amount credit contracts

National Consumer Credit Protection Act 2009

Schedule 3--Consumer leases

National Consumer Credit Protection Act 2009

Schedule 4--Avoidance

National Consumer Credit Protection Act 2009

Schedule 5--Consumer leases for indefinite terms

National Consumer Credit Protection Act 2009

Schedule 6--Consequential and other amendments

National Consumer Credit Protection Act 2009

Schedule 7--Application provisions

National Consumer Credit Protection (Transitional and

Consequential Provisions) Act 2009

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

A Bill for an Act to amend the law relating to

consumer credit and consumer leases, and for

related purposes

The Parliament of Australia enacts:

1 Short title

This Act is the

National Consumer Credit Protection Amendment

(Supporting Economic Recovery) Act 2020

2 Commencement

(1) Each provision of this Act specified in column 1 of the table

commences, or is taken to have commenced, in accordance with

column 2 of the table. Any other statement in column 2 has effect

according to its terms.

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1. Sections 1 to 3

and anything in

this Act not

elsewhere covered

by this table

The day this Act receives the Royal Assent.

2. Schedule 1,

Parts 1 and 2

The later of:

(a) the day after this Act receives the Royal

Assent; and

(b) 1 March 2021.

3. Schedule 1,

Part 3

The day after the end of the period of 6

months beginning on the day the provisions

covered by table item 2 commence.

4. Schedules 2

and 3

The day after the end of the period of 6

months beginning on the day this Act

receives the Royal Assent.

5. Schedule 4

The day after this Act receives the Royal

Assent.

6. Schedules 5

and 6

The day after the end of the period of 6

months beginning on the day this Act

receives the Royal Assent.

7. Schedule 7

The day after this Act receives the Royal

Assent.

Note:

This table relates only to the provisions of this Act as originally

enacted. It will not be amended to deal with any later amendments of

this Act.

(2) Any information in column 3 of the table is not part of this Act.

Information may be inserted in this column, or information in it

may be edited, in any published version of this Act.

3 Schedules

Legislation that is specified in a Schedule to this Act is amended or

repealed as set out in the applicable items in the Schedule

Schedule 1

New regulatory framework for provision of consumer credit

Part 1

Main amendments

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

Schedule 1--New regulatory framework for

provision of consumer credit

Part 1--Main amendments

National Consumer Credit Protection Act 2009

1 Subsection 5(1)

Insert:

low limit credit contract

: a credit contract is a

low limit credit

contract

if:

(a) the contract is a small amount credit contract; or

(b) the contract would be a small amount credit contract if

paragraph (b) of the definition of

small amount credit

contract

(which is about credit providers who are not ADIs)

were disregarded.

non-ADI credit conduct

: see subsection 133EA(5).

non-ADI credit standard

means a standard determined under

section 133EA.

reverse mortgaged property

, in relation to a credit contract for a

reverse mortgage,

has the same meaning as in section 204 of the

National Credit Code.

2 Section 111 (paragraph begi

nning "This Part")

Omit "These rules are aimed at better informing consumers and

preventing them from being in unsuitable credit contracts.".

3 Section 1

11 (paragraph beginning "Division 4")

Omit "Division 4 requires a licensee, before providing credit assistance

to a consumer in relation to a credit contract", substitute "Division 4

applies only in relation to low limit credit contracts. It requires a

licensee, before providing credit assistance to a consumer in relation to

a low limit credit contract".

New regulatory framework for provision of consumer credit

Schedule 1

Main amendments

Part 1

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

4 Section 1

11 (paragraph beginning "Division 6")

Repeal the paragraph, substitute:

Division 6 applies only in relation to low limit credit contracts. It

prohibits a licensee from providing credit assistance to a consumer

in relation to a low limit credit contract if the contract will be

unsuitable for the consumer.

5 Paragraph 113(2)(i)

Repeal the paragraph, substitute:

(i) give information about the licensee's obligations under

sections 120 and 123 in relation to low limit credit contracts;

and

6 Division 4 of Part 3-1 (heading)

Before "

credit contracts

", insert "

low limit

7 Section 115 (heading)

Before "

credit contracts

", insert "

low limit

8 Paragraphs 115(1)(a) and (b)

Before "credit contract", insert "low limit".

9 Subsection 115(2)

Before "credit contract", insert "low limit".

10 Section 116 (heading)

Before "

credit contract

", insert "

low limit

11 Paragraph 116(1)(b)

Before "credit contract", insert "low limit".

12 Paragraph 116(2)(b)

Before "credit contract", insert "low limit".

13 Paragraph 117(1)(a)

Before "credit contract", insert "low limit".

Schedule 1

New regulatory framework for provision of consumer credit

Part 1

Main amendments

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

14 Subsection 117(1A)

Repeal the subsection, substitute:

(1A) If the consumer holds (whether alone or jointly with another

person) an account with an ADI into which income payable to the

consumer is credited, the licensee must, in verifying the

consumer's financial situation for the purposes of

paragraph 115(1)(d), obtain and consider account statements that

cover at least the immediately preceding period of 90 days.

15 Section 118 (heading)

Before "

credit contract

", insert "

low limit

16 Subsection 118(1)

Before "credit contract" (wherever occurring), insert "low limit".

17 Subsection 118(3AA)

Repeal the subsection.

18 Subsection 118(3A)

Omit "the contract is a small amount credit contract (the

relevant

contract

) and".

19 Subsection 118(3A)

Omit "under the relevant contract", substitute "under the contract".

20 Section 119 (heading)

Omit "

the credit contract

", substitute "

the low limit credit contract

21 Subsection 119(1)

Before "credit contract", insert "low limit".

22 Subsection 119(3A)

Repeal the subsection.

23 Division 6 of Part 3-1 (heading)

Before "

credit contracts

", insert "

low limit

New regulatory framework for provision of consumer credit

Schedule 1

Main amendments

Part 1

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

24 Section 123 (heading)

Before "

credit contracts

", insert "

low limit

25 Paragraphs 123(1)(a) and (b)

Before "credit contract", insert "low limit".

26 Subsection 123(3AA)

Repeal the subsection.

27 Subsection 123(3A)

Omit "the contract is a small amount credit contract (the

relevant

contract

) and".

28 Subsection 123(3A)

Omit "under the relevant contract", substitute "under the contract".

29 Section 124 (heading)

Before "

credit contracts

", insert "

low limit

30 Subsection 124(1)

Before "credit contract", insert "low limit".

31 Subsection 124(3A)

Repeal the subsection.

32 Part 3-2 (heading)

Omit "

: general rules

33 Section 1

25 (paragraph beginning "This Part")

Omit "These rules are aimed at better informing consumers and

preventing them from being in unsuitable credit contracts.".

34 Section 1

25 (paragraph beginning "Division 3")

Omit "Division 3 requires a licensee, before doing particular things

(such as entering a credit contract)", substitute "Division 3 applies only

in relation to low limit credit contracts. It requires a licensee, before

doing particular things (such as entering a low limit credit contract)".

Schedule 1

New regulatory framework for provision of consumer credit

Part 1

Main amendments

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

35 Section 1

25 (paragraph beginning "Division 4")

Repeal the paragraph, substitute:

Division 4 applies only in relation to low limit credit contracts. It

prohibits a licensee from entering or increasing the credit limit of a

low limit credit contract that is unsuitable for a consumer.

36 Paragraph 126(2)(f)

Repeal the paragraph, substitute:

(f) give information about the licensee's obligations under

sections 132 and 133 in relation to low limit credit contracts;

and

37 Division 3 of Part 3-2 (heading)

After "

unsuitability

", insert "

of low limit credit contract

38 Section 128 (at the end of the heading)

Add "

of low limit credit contract

39 Paragraphs 128(a), (aa) and (b)

Before "credit contract", insert "low limit".

40 Paragraph 128(ba)

Before "credit contract", insert "a low limit".

41 Section 129 (heading)

Before "

credit contract

", insert "

low limit

42 Paragraph 129(b)

Before "credit contract", insert "low limit".

43 Paragraph 130(1)(a)

Before "credit contract", insert "low limit".

44 Section 131 (heading)

Before "

credit contract

", insert "

low limit

New regulatory framework for provision of consumer credit

Schedule 1

Main amendments

Part 1

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

45 Subsection 131(1)

Before "credit contract", insert "low limit".

46 Subsection 131(3AA)

Repeal the subsection.

47 Subsection 131(3A)

Omit "the contract is a small amount credit contract (the

relevant

contract

) and".

48 Subsection 131(3A)

Omit "under the relevant contract", substitute "under the contract".

49 Subsection 132(1)

Before "credit contract", insert "low limit".

50 Paragraph 132(2)(a)

Before "credit contract", insert "low limit".

51 Division 4 of Part 3-2 (heading)

Before "

credit contracts

", insert "

low limit

52 Section 133 (heading)

Before "

credit contracts

", insert "

low limit

53 Paragraphs 133(1)(a) and (b)

Before "credit contract", insert "low limit".

54 Subsection 133(3AA)

Repeal the subsection.

55 Subsection 133(3A)

Omit "the contract is a small amount credit contract (the

relevant

contract

) and".

56 Subsection 133(3A)

Omit "under the relevant contract", substitute "under the contract".

Schedule 1

New regulatory framework for provision of consumer credit

Part 1

Main amendments

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

57 Sections 133A, 133B and 133C (paragraphs beginning

"This Part")

Omit "general".

58 Section 133DA (paragraph beginn

ing "Before")

Repeal the paragraph, substitute:

Before providing credit assistance, or entering into a credit

contract, for a reverse mortgage, licensees must provide

information to the consumer. The information includes projections

of the person's equity in the property that may be covered by the

reverse mortgage and also a comparison of this projection and the

person's likely aged care accommodation costs.

59 At the end of section 133DA

Add:

In certain circumstances, licensees must not enter, or offer to enter,

a credit contract for a reverse mortgage, or increase, or offer to

increase, the credit limit of a credit contract for a reverse mortgage.

60 Section 133DB (heading)

Omit "

projections of equity

", substitute "

information

61 Subsection 133DB(1) (heading)

Repeal the heading, substitute:

Requirement to give information

62 Subsection 133DB(1)

Omit "Before a licensee makes a preliminary assessment for the

purposes of paragraph 115(1)(c) or (2)(a), or an assessment for the

purposes of paragraph 128(c), in connection with a credit contract with

a consumer for a reverse mortgage,", substitute "Before a licensee

engages in conduct covered by subsection (1A) in connection with a

credit contract with a consumer for a reverse mortgage".

New regulatory framework for provision of consumer credit

Schedule 1

Main amendments

Part 1

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

63 After paragraph 133DB(1)(b)

Insert:

(ba) show the consumer in person, or give the consumer in a way

prescribed by the regulations, a comparison of:

(i) the projections; and

(ii) the likely amount of the person's aged care

accommodation costs, based on the consumer's stated

requirements and objectives in meeting possible future

aged care accommodation needs, including the time (if

any) at which the consumer has stated that the consumer

is likely to incur costs for future aged care

accommodation and the likely amount of those costs;

and

(bb) give the consumer a printed copy of the comparison; and

64 After subsection 133DB(1)

Insert:

(1A) This subsection covers conduct that consists of a licensee:

(a) providing credit assistance to the consumer in relation to a

credit contract for a reverse mortgage; or

(b) entering a credit contract for a reverse mortgage with a

consumer who will be the debtor under the contract; or

the licensee considers that the consumer is eligible to enter a

credit contract for a reverse mortgage with the licensee; or

(d) increasing the credit limit of a credit contract for a reverse

mortgage with a consumer who is the debtor under the

contract; or

(e) making an unconditional representation to a consumer that

the licensee considers that the credit limit of a credit contract

for a reverse mortgage between the consumer and the

licensee will be able to be increased.

65 After subsection 133DB(4)

Insert:

Schedule 1

New regulatory framework for provision of consumer credit

Part 1

Main amendments

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

Defences for not giving a comparison

(4A) For the purposes of paragraphs (1)(ba) and (bb), and of

subsection (2) so far as it relates to either of those paragraphs, it is

a defence if the licensee reasonably believes that:

(a) another person has:

(i) shown the consumer in person the comparison described

in paragraph (1)(ba); and

(ii) given the consumer a printed copy of the comparison;

and

(b) the comparison is the same, or substantially the same, as the

comparison paragraph (1)(ba) requires the licensee to show

the consumer.

Note:

For the purposes of subsection (2), a defendant bears an evidential

burden in relation to the matter in subsection (4A) (see

subsection 13.3(3) of the

Criminal Code

(4B) For the purposes of paragraphs (1)(ba) and (bb), and of

subsection (2) so far as it relates to either of those paragraphs, it is

a defence if the circumstances prescribed by the regulations exist.

Note:

For the purposes of subsection (2), a defendant bears an evidential

burden in relation to the matter in subsection (4B) (see

subsection 13.3(3) of the

Criminal Code

66 At the end of Part 3-2D

Add:

133DF Prohibition on certain conduct relating to reverse mortgages

(1) A licensee must not:

(a) enter a credit contract for a reverse mortgage with a

consumer who will be a debtor under the contract; or

(b) make an unconditional representation to a consumer that the

licensee considers that the consumer is eligible to enter a

credit contract for a reverse mortgage with the licensee under

which the consumer will be a debtor; or

mortgage with a consumer who is a debtor under the

contract; or

New regulatory framework for provision of consumer credit

Schedule 1

Main amendments

Part 1

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

(d) make an unconditional representation to a consumer who is a

debtor under a credit contract for a reverse mortgage with the

licensee that the licensee considers that the credit limit of the

contract will be able to be increased;

on a day (the

credit day

) if the circumstances referred to in

subsection (2) or (3) exist.

Note:

Sections 178 and 179 provide for remedies for anyone who suffers, or

is likely to suffer, loss or damage because of a breach of this section.

For example, if a licensee makes a credit contract for a reverse

mortgage with a consumer when the circumstances referred to in

subsection (2) or (3) of this section exist, a person who suffers, or is

likely to suffer, loss as a result may be able to get court orders under

section 178 or 179 to put the person in a position like the one the

person would have been in had the circumstances not existed.

Civil penalty:

5,000 penalty units.

Youngest debtor is aged under 56 years

(2) The circumstances are that, on the credit day:

(a) the youngest person who is, or would be, a debtor under the

credit contract is aged under 56 years; and

(b) the loan to value ratio of the mortgage worked out under

subsection (5) exceeds 15%.

Youngest debtor is aged 56 years or older

(3) The circumstances are that, on the credit day:

(a) the youngest person who is, or would be, a debtor under the

credit contract is aged 56 years or older; and

(b) the loan to value ratio of the mortgage worked out under

subsection (5) exceeds the sum of:

(i) 16%; and

(ii) 1% for each year (if any) that the person is aged more

than 56 years.

Exception for special circumstances

(4) Subsection (1) does not apply if the licensee reasonably believed

that the credit contract, or the increase to the credit limit of the

credit contract, was appropriate because of special circumstances

of the consumer.

Schedule 1

New regulatory framework for provision of consumer credit

Part 1

Main amendments

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

Loan to value ratio

(5) For the purposes of paragraphs (2)(b) and (3)(b), the loan to value

ratio of a reverse mortgage is the amount of credit owed, or

intended to be owed, under the credit contract for the reverse

mortgage, expressed as a percentage of the value of the dwelling or

land that is, or may become, reverse mortgaged property.

67 After Part 3-2D

Insert:

Part 3-2E--Licensees that are credit providers

under credit contracts: additional rules for

non-ADI credit conduct

Division 1--Introduction

133E Guide to this Part

This Part has rules that apply to licensees in relation to credit

contracts (other than small amount credit contracts), where the

credit provider is not an ADI.

The Part provides that the Minister may make standards specifying

requirements for systems, policies and processes a licensee must

establish and maintain.

Division 2--Standards for conduct relating to non-ADI

credit conduct

133EA Non-ADI credit standards

Power to make standards

(1) The Minister may, by legislative instrument, determine non-ADI

credit standards that specify requirements with which a licensee's

New regulatory framework for provision of consumer credit

Schedule 1

Main amendments

Part 1

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

systems, policies and processes relating to non-ADI credit conduct

must comply.

(2) The non-ADI credit standards may require a licensee to give a

consumer a copy of a document at a time, and in a manner,

specified in the standard.

(3) The non-ADI credit standards may be of general application or

may be limited as provided in the determination.

(4) Without limiting subsection 33(3A) of the

Acts Interpretation Act

1901

, the non-ADI credit standards may make different provision

in relation to:

(a) different situations; or

(b) different activities; or

(d) different classes of credit providers.

Non-ADI credit conduct

(5)

Non-ADI credit conduct

is conduct that consists of a licensee:

(a) entering a credit contract covered by subsection (6) with a

consumer who will be the debtor under the contract; or

(b) making an unconditional representation to a consumer that

the licensee considers that the consumer is eligible to enter a

credit contract covered by subsection (6) with the licensee; or

subsection (6) with a consumer who is the debtor under the

contract; or

(d) making an unconditional representation to a consumer that

the licensee considers that the credit limit of a credit contract

covered by subsection (6) between the consumer and the

licensee will be able to be increased.

Non-ADI credit contracts

(6) This subsection covers a credit contract if:

(a) the contract is not a small amount credit contract; and

(b) the credit provider under the contract is not an ADI.

Schedule 1

New regulatory framework for provision of consumer credit

Part 1

Main amendments

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

133EB Licensee must establish and maintain systems, policies and

processes

(1) A licensee must not engage in non-ADI credit conduct if:

(a) the non-ADI credit standards specify requirements relating to

systems, policies and processes relating to that conduct; and

(b) either:

(i) the licensee has not established, or does not maintain,

systems, policies and processes that comply with those

requirements; or

(ii) the licensee does not have a written plan that documents

the systems, policies and processes the licensee has

established, and maintains, that comply with those

requirements.

Civil penalty:

5,000 penalty units.

(2) A licensee must retain a plan described in subparagraph (1)(b)(ii)

for 7 years after the end of the period to which the plan relates.

Civil penalty:

5,000 penalty units.

133EC Licensee must comply with requirements of its systems,

policies and processes

(1) A licensee must not engage in non-ADI credit conduct if:

(a) the non-ADI credit standards specify requirements relating to

systems, policies and processes relating to the non-ADI credit

conduct; and

(b) the licensee has established systems, policies and processes

for the purpose or purported purpose of complying with those

requirements; and

engage in conduct (the

required conduct

) before the licensee

engages in the non-ADI credit conduct; and

(d) the licensee has not engaged in the required conduct.

(2) A licensee must not repeatedly contravene subsection (1).

Civil penalty:

5,000 penalty units.

New regulatory framework for provision of consumer credit

Schedule 1

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Part 1

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

(3) The obligation a licensee has to comply with subsection (1) is

taken for the purposes of the following provisions not to be an

obligation under the credit legislation:

(a) paragraph 37(1)(b) (when a licence may be granted);

(b) paragraph 47(1)(d) (general conduct obligations for

licensees);

cancelled);

(d) paragraphs 80(1)(d) and (e) (when ASIC may make a

banning order).

(4) To avoid doubt, subsection (3) does not affect the operation of the

provisions referred to in that subsection in relation to the obligation

that arises under subsection (2).

133ED Giving a consumer a document

(1) If the non-ADI credit standards require a licensee to give a

consumer a copy of a document at a time, the licensee must give

the consumer a copy of the document at that time.

Civil penalty:

5,000 penalty units.

(2) The licensee must give the consumer a copy of the document in the

manner (if any) specified in the standards.

(3) The licensee must not request or demand payment of an amount for

giving the consumer a copy of the document.

Civil penalty:

5,000 penalty units.

Strict liability offence

(4) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1) or

(3); and

(b) the person engages in conduct; and

Criminal penalty:

50 penalty units.

(5) Subsection (4) is an offence of strict liability.

Schedule 1

New regulatory framework for provision of consumer credit

Part 1

Main amendments

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

68 Section 1

60A (paragraph beginning "Division 5")

Repeal the paragraph.

69 Division 5 of Part 3-6A

Repeal the Division.

New regulatory framework for provision of consumer credit

Schedule 1

Related amendments

Part 2

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

Part 2--Related amendments

Age Discrimination Act 2004

70 Schedule 2 (after table item 8)

Insert:

National Consumer Credit Protection Act 2009

section 133DF

Schedule 1

New regulatory framework for provision of consumer credit

Part 3

Amendments relating to best interests obligations

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

Part 3--Amendments relating to best interests

obligations

National Consumer Credit Protection Act 2009

71 Part 3-5A (heading)

Repeal the heading, substitute:

Part 3-5A--Best interests obligations and

remuneration

72 Section 158K

Repeal the section, substitute:

158K Guide to this Part

This Part imposes obligations on licensees and credit

representatives.

Division 2 requires certain credit assistance providers and their

credit representatives to act in the best interests of consumers when

providing credit assistance in relation to credit contracts or

consumer leases. Where there is a conflict of interest, these credit

assistance providers or representatives must give priority to

consumers in providing the credit assistance.

Division 4 prohibits mortgage brokers and mortgage intermediaries

from accepting conflicted remuneration. Employers, credit

providers and mortgage intermediaries must not give conflicted

remuneration to mortgage brokers or mortgage intermediaries. The

circumstances in which these bans on conflicted remuneration

apply are to be set out in the regulations.

73 Subdivision A of Division 2 of Part 3-5A (heading)

Omit "

provide credit assistance in relation to credit contracts

substitute "

carry on a business of providing credit assistance

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Part 3

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

74 Section 158L

Repeal the section, substitute:

158L Application of this Subdivision

Mortgage brokers

(1) This Subdivision applies in relation to credit assistance provided

by a licensee to a consumer in relation to a credit contract if the

licensee is a mortgage broker.

Certain other credit brokers

(2) This Subdivision also applies in relation to credit assistance

provided by a licensee to a consumer in relation to a credit contract

if:

(a) the licensee carries on a business of providing credit

assistance in relation to credit contracts; and

(b) the licensee does not perform the obligations, or exercise the

rights, of a credit provider in relation to the majority of those

credit contracts; and

assistance in relation to credit contracts offered by more than

one credit provider.

Brokers of consumer leases

(3) This Subdivision also applies in relation to credit assistance

provided by a licensee to a consumer in relation to a consumer

lease if:

(a) the licensee carries on a business of providing credit

assistance in relation to consumer leases; and

(b) the licensee does not perform the obligations, or exercise the

rights, of a lessor in relation to the majority of those

consumer leases; and

assistance in relation to consumer leases offered by more

than one lessor.

Schedule 1

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Part 3

Amendments relating to best interests obligations

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

Credit representatives not covered

(4) However, this Subdivision does not apply in relation to credit

assistance provided to a consumer by a credit representative acting

within the scope of the credit representative's actual or apparent

authority from the licensee.

Note 1:

A credit representative in these circumstances is covered by

Subdivision B.

Note 2:

The conduct of any other representative, acting within the scope of

actual or apparent authority from the licensee, is taken to have been

engaged in also by the licensee: see sections 324 and 325.

75 Section 158LD

Repeal the section, substitute:

158LD Application of this Subdivision

Mortgage brokers

(1) This Subdivision applies in relation to credit assistance provided to

a consumer in relation to a credit contract by a credit representative

acting within the scope of the credit representative's actual or

apparent authority from a licensee, if either the credit

representative or the licensee is a mortgage broker.

Certain other credit brokers

(2) This Subdivision also applies in relation to credit assistance

provided to a consumer in relation to a credit contract by a credit

representative acting within the scope of the credit representative's

actual or apparent authority from a licensee, if:

(a) the credit representative, or the licensee, carries on a business

of providing credit assistance in relation to credit contracts;

and

(b) neither the credit representative nor the licensee performs the

obligations, or exercises the rights, of a credit provider in

relation to the majority of those credit contracts; and

licensee (as the case requires) provides credit assistance in

New regulatory framework for provision of consumer credit

Schedule 1

Amendments relating to best interests obligations

Part 3

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

relation to credit contracts offered by more than one credit

provider.

Brokers of consumer leases

(3) This Subdivision also applies in relation to credit assistance

provided to a consumer in relation to a consumer lease by a credit

representative acting within the scope of the credit representative's

actual or apparent authority from a licensee, if:

(a) the credit representative, or the licensee, carries on a business

of providing credit assistance in relation to consumer leases;

and

(b) neither the credit representative nor the licensee performs the

obligations, or exercises the rights, of a lessor in relation to

the majority of those consumer leases; and

licensee (as the case requires) provides credit assistance in

relation to consumer leases offered by more than one lessor.

76 Division 4 of Part 3-5A (heading)

Repeal the heading, substitute:

Division 4--Mortgage brokers and mortgage

intermediaries: conflicted remuneration

Schedule 2

Small amount credit contracts

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

Schedule 2--Small amount credit contracts

National Consumer Credit Protection Act 2009

1 Subsection 5(1)

Insert:

repayment date

: see subsection 133CD(3).

unsolicited communication to a consumer

: see

subsection 133CF(2).

2 Section 111 (paragraph beginning

"Division 7")

Repeal the paragraph, substitute:

Division 7 prohibits a licensee from providing credit assistance to a

consumer in relation to short-term credit contracts, and imposes

requirements on a licensee who makes representations about

providing credit assistance in relation to small amount credit

contracts. It also imposes requirements in relation to recording the

preliminary assessment that a small amount credit contract is not

unsuitable.

3 Subsection 118(3A)

Repeal the subsection.

4 Subsection 123(3A)

Repeal the subsection.

5 Section 124B

Repeal the section, substitute:

Small amount credit contracts

Schedule 2

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

124B Licensee who makes representations about credit assistance in

relation to small amount credit contracts must display

and give information

Requirement

(1) If a licensee represents that the licensee provides, or is able to

provide, credit assistance to consumers in relation to small amount

credit contracts, the licensee must:

(a) display information; and

(b) give information to consumers;

in accordance with any determination made by ASIC under

subsection (2).

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine one or more of the

following matters relating to licensees that make representations

described in subsection (1):

(a) the information that the licensees must display;

(b) how the licensees must display the information;

(d) the information that the licensees must give to consumers;

(e) how the licensees must give the information to consumers;

(f) when the licensees must give the information to consumers.

(3) In making the determination under subsection (2), ASIC must take

into account the risks associated with small amount credit contracts

and the alternatives that may be available to consumers.

Offence

(4) 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

Criminal penalty:

50 penalty units.

Schedule 2

Small amount credit contracts

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

124C Written documentation required in relation to the preliminary

assessment for a small amount credit contract

(1) If, in a preliminary assessment made for the purposes of

paragraph 115(1)(c) or (2)(a), the licensee assesses that a small

amount credit contract is not unsuitable for a consumer, before

providing credit assistance to the consumer by:

(a) suggesting that the consumer apply, or assisting the consumer

to apply, for the small amount credit contract; or

(b) suggesting that the consumer apply, or assisting the consumer

to apply, for the increase to the credit limit of the small

amount credit contract which is the subject of that

preliminary assessment; or

credit contract;

the licensee must document in writing and in accordance with any

requirements determined by ASIC under subsection (2):

(d) the preliminary assessment; and

(e) the inquiries and verification made for the purposes of

paragraph 115(1)(d) or (2)(b) in relation to that preliminary

assessment.

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine the form in which

the matters in paragraphs (1)(d) and (e) are to be documented in

writing.

(3) Before making a determination under subsection (2), ASIC must:

(a) consult the Information Commissioner in relation to matters

that relate to the privacy functions (within the meaning of the

Australian Information Commissioner Act 2010

); and

(b) have regard to any submissions made by the Information

Commissioner because of that consultation.

6 Subsection 131(3A)

Repeal the subsection.

7 Subsection 133(3A)

Repeal the subsection.

Small amount credit contracts

Schedule 2

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

8 Section 133C (paragraph beginning

"Division 2")

Repeal the paragraph, substitute:

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 imposes

requirements in relation to recording the assessment that a small

amount credit contract is not unsuitable and prohibits a licensee

from making certain unsolicited communications in relation to

small amount credit contracts. It also provides that the consumer is

not liable to pay certain fees and charges under small amount credit

contracts in certain circumstances.

9 Section 133CB

Repeal the section, substitute:

133CB Licensee who makes representations in relation to small

amount credit contracts must display and give

information

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, the licensee must:

(a) display information; and

(b) give information to consumers;

in accordance with any determination made by ASIC under

subsection (2).

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine one or more of the

following matters relating to licensees that make representations

described in subsection (1):

(a) the information that the licensees must display;

Schedule 2

Small amount credit contracts

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

(b) how the licensees must display the information;

(d) the information that the licensees must give to consumers;

(e) how the licensees must give the information to consumers;

(f) when the licensees must give the information to consumers.

(3) In making a determination under subsection (2), ASIC must take

into account the risks associated with small amount credit contracts

and the alternatives that may be available to consumers.

Offence

(4) 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

Criminal penalty:

50 penalty units.

10 Subsection 133CC(1)

Repeal the subsection (not including the heading), substitute:

(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 the repayments that would be required under

the contract would not meet the requirements prescribed by the

regulations.

Civil penalty:

5,000 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.

11 At the end of section 133CC

Add:

Loss of certain fees and charges

(3) If:

Small amount credit contracts

Schedule 2

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

(a) a licensee enters into a small amount credit contract in

contravention of subsection (1); and

(b) either:

(i) the court has made a declaration that the licensee has

contravened subsection (1) in relation to that contract;

(ii) the licensee is found guilty of an offence against

subsection (2) in relation to that contract;

then:

liable) to pay a fee or charge of the kind referred to in

paragraph 31A(1)(a) or (b) of the National Credit Code under

that small amount credit contract (whether or not the liability

is imposed consistently with the National Credit Code); and

(d) the consumer may recover as a debt due to the consumer the

total of any amounts paid by the consumer that, in

accordance with paragraph (c), the consumer is not liable to

pay.

12 At the end of Division 2 of Part 3-2C

Add:

133CD Licensee must not enter into a small amount credit contract

if repayment amounts and intervals are not equal

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 any of the following applies:

(a) repayments that would be required under the contract are not

equal;

(b) the intervals between repayment dates would not be equal;

provided under the contract and the first repayment date

would be longer than twice the interval between the first

repayment date and the second repayment date.

Civil penalty:

5,000 penalty units.

Schedule 2

Small amount credit contracts

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

(2) For the purposes of paragraph (1)(a), repayments that would be

required under a small amount credit contract are taken to be equal

if:

(a) each repayment is of the same amount; or

(b) both of the following apply:

(i) each repayment (other than the last repayment) is the

same amount;

(ii) the last repayment is up to 5% less than each other

repayment; or

under subsection (5).

(3) A

repayment date

in relation to a small amount credit contract is

the date on or by which a repayment is required to be made under

the contract.

(4) For the purposes of paragraph (1)(b), if a small amount credit

contract provides that:

(a) repayments that would be required under the contract are to

be made on or by a fixed day of each week, fortnight or

month; and

(b) if that fixed day falls on a day that is not a business day--the

repayment would be required to be made on or by the

immediately preceding or succeeding business day;

the intervals between repayment dates are taken to be equal.

(5) ASIC may, by legislative instrument, determine conditions for the

purposes of paragraph (2)(c).

(6) Nothing in this section is intended to limit the regulations which

may be made for the purposes of section 133CC.

Offence

(7) 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

Criminal penalty:

100 penalty units.

Small amount credit contracts

Schedule 2

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

Strict liability offence

(8) 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

Criminal penalty:

10 penalty units.

(9) Subsection (8) is an offence of strict liability.

133CE Written documentation required in relation to the

assessment for a small amount credit contract

(1) If, in an assessment made for the purposes of paragraph 128(c), the

licensee assesses that a small amount credit contract is not

unsuitable for a consumer, before:

(a) entering into the small amount credit contract with the

consumer; or

(b) making an unconditional representation to the consumer that

the licensee considers that the consumer is eligible to enter

into the small amount credit contract with the licensee; or

which is the subject of that assessment; or

(d) making an unconditional representation to the consumer that

the licensee considers that the credit limit of the small

amount credit contract between the consumer and the

licensee will be able to be increased;

the licensee must document in writing and in accordance with any

requirements determined by ASIC under subsection (2):

(e) the assessment; and

(f) the inquiries and verification made for the purposes of

paragraph 128(d) in relation to that assessment.

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine the form in which

the matters in paragraphs (1)(e) and (f) are to be documented in

writing.

Schedule 2

Small amount credit contracts

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

(3) Before making a determination under subsection (2), ASIC must:

(a) consult the Information Commissioner in relation to matters

that relate to the privacy functions (within the meaning of the

Australian Information Commissioner Act 2010

); and

(b) have regard to any submissions made by the Information

Commissioner because of that consultation.

133CF Licensee not to make certain unsolicited communications in

relation to a small amount credit contract

Prohibition on certain unsolicited communications

(1) A licensee must not make, or arrange for the making of, an

unsolicited communication to a consumer (whether orally, in

writing or by electronic means) that contains:

(a) an offer to the consumer to enter into a small amount credit

contract; or

(b) an invitation to the consumer to apply for a small amount

credit contract;

if the consumer is or has at any time been a debtor under a small

amount credit contract with the licensee or another credit provider.

Civil penalty:

5,000 penalty units.

Meaning of

unsolicited communication

to a consumer

(2) An

unsolicited communication

to a consumer

is a communication

to a consumer or a consumer's agent that is made by a person by

dealing directly with the consumer or the consumer's agent in any

of the following circumstances:

(a) no prior request has been made by the consumer to the

licensee for that communication;

(b) the consumer has made a prior request to the licensee for that

communication and that request was solicited by or on behalf

of the licensee;

However, the regulations may prescribe that specified kinds of

communications are not unsolicited communications to which this

section applies.

Small amount credit contracts

Schedule 2

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

Offence

(3) 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

Criminal penalty:

100 penalty units.

Loss of certain fees and charges

(4) If:

(a) a licensee makes an unsolicited communication to a

consumer in contravention of subsection (1); and

(b) the licensee enters into a small amount credit contract with

that consumer within 30 days of that unsolicited

communication being made; and

(i) the court has made a declaration that the licensee has

contravened subsection (1) in relation to that unsolicited

communication; or

(ii) the licensee is found guilty of an offence against

subsection (3) in relation to that unsolicited

communication;

then:

(d) the consumer is not liable (and is taken never to have been

liable) to pay a fee or charge of the kind referred to in

paragraph 31A(1)(a) or (b) of the National Credit Code under

the small amount credit contract (whether or not the liability

is imposed consistently with the National Credit Code); and

(e) the consumer may recover as a debt due to the consumer the

amount paid by the consumer that, in accordance with

paragraph (d), the consumer is not liable to pay.

13 After section 31B of the

National Credit Code

Insert:

Schedule 2

Small amount credit contracts

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

31C Prohibition on unexpired monthly fees in relation to small

amount credit contracts

Requirement

(1) A credit provider must not require or accept payment by the debtor

under a small amount credit contract of an unexpired monthly fee.

Note:

A penalty may be imposed for contravention of a key requirement in

this subsection: see Part 6.

(2) An

unexpired monthly fee

in relation to a small amount credit

contract is each permitted monthly fee that is in respect of a month

that commences after the date on which the contract is paid out.

(3) If a credit provider contravenes subsection (1) in relation to a small

amount credit contract:

(a) the debtor is not liable (and is taken never to have been

liable) to make the payment of the unexpired monthly fee to

the credit provider; and

(b) the debtor may recover as a debt due to the debtor the amount

of any payment of the unexpired monthly fee made by the

debtor to the credit provider.

Offence

(4) 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

Criminal penalty:

100 penalty units.

Strict liability offence

(5) 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

Small amount credit contracts

Schedule 2

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

Criminal penalty:

10 penalty units.

(6) Subsection (5) is an offence of strict liability.

14 Subsection 72(3) of the

National Credit Code

(paragraph (a) of the note)

After "such as", insert "family violence,".

15 Paragraph 82(2)(b) of the

National Credit Code

Repeal the paragraph, substitute:

(b) either:

(i) for a credit contract that is not a small amount credit

contract--the interest charges and all other fees and

charges payable by the debtor to the credit provider up

to the date of termination; or

(ii) for a small amount credit contract--all fees and charges

payable by the debtor to the credit provider up to the

date of termination, excluding any unexpired monthly

fee;

16 After paragraph 111(1)(i) of the

National Credit Code

Insert:

(ia) section 31C;

17 Subsection 204(1) of the

National Credit Code

Insert:

unexpired monthly fee

: see subsection 31C(2).

Schedule 3

Consumer leases

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

Schedule 3--Consumer leases

National Consumer Credit Protection Act 2009

1 Subsection 5(1)

Insert:

consumer lease for household goods

has the same meaning as in

section 204 of the National Credit Code.

household goods

has the same meaning as in section 204 of the

National Credit Code.

2 At the end of section 134

Add:

Division 7 imposes requirements on a licensee who makes

representations about providing credit assistance in relation to

consumer leases for household goods. It also imposes requirements

in relation to recording the preliminary assessment that a consumer

lease is not unsuitable.

3 After subsection 140(1)

Insert:

(1A) If:

(a) the consumer lease is a consumer lease for household goods;

and

(b) the consumer holds (whether alone or jointly with another

person) an account with an ADI into which income payable

to the consumer is credited;

the licensee must, in verifying the consumer's financial situation

for the purposes of paragraph 138(1)(d), obtain and consider

account statements that cover at least the immediately preceding

period of 90 days.

(1B) Subsection (1A) does not limit paragraph (1)(c).

Consumer leases

Schedule 3

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

4 At the end of Part 3-3

Add:

Division 7--Special rules for consumer leases for

household goods

147A Licensee who makes representations about credit assistance in

relation to consumer leases for household goods must

display and give information

Requirement

(1) If a licensee represents that the licensee provides, or is able to

provide, credit assistance to consumers in relation to consumer

leases for household goods, the licensee must:

(a) display information; and

(b) give information to consumers;

in accordance with any determination made by ASIC under

subsection (2).

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine one or more of the

following matters relating to licensees that make representations

described in subsection (1):

(a) the information that the licensees must display;

(b) how the licensees must display the information;

(d) the information that the licensees must give to consumers;

(e) how the licensees must give the information to consumers;

(f) when the licensees must give the information to consumers.

(3) In making a determination under subsection (2), ASIC must take

into account the risks associated with consumer leases for

household goods and the alternatives that may be available to

consumers.

Schedule 3

Consumer leases

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

Offence

(4) 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

Criminal penalty:

50 penalty units.

147B Written documentation required in relation to the preliminary

assessment for a consumer lease for household goods

(1) If, in a preliminary assessment made for the purposes of

paragraph 138(1)(c) or (2)(a), the licensee assesses that a consumer

lease for household goods is not unsuitable for a consumer, before

providing credit assistance to the consumer by:

(a) suggesting that the consumer apply for a particular consumer

lease with a particular lessor; or

(b) assisting the consumer to apply for a particular consumer

lease with a particular lessor; or

lease with a particular lessor;

the licensee must document in writing and in accordance with any

requirements determined by ASIC under subsection (2):

(d) the preliminary assessment; and

(e) the inquiries and verification made for the purposes of

paragraph 138(1)(d) or (2)(b) in relation to that preliminary

assessment.

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine the form in which

the matters in paragraphs (1)(d) and (e) are to be documented in

writing.

(3) Before making a determination under subsection (2), ASIC must:

(a) consult the Information Commissioner in relation to matters

that relate to the privacy functions (within the meaning of the

Australian Information Commissioner Act 2010

); and

Consumer leases

Schedule 3

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

(b) have regard to any submissions made by the Information

Commissioner because of that consultation.

5 At the end of section 148

Add:

Division 5 prohibits a licensee from entering into, or offering to

enter into, a consumer lease for household goods in certain

circumstances and imposes requirements on a licensee who makes

representations about consumer leases for household goods. It also

imposes requirements in relation to recording an assessment that a

consumer lease is not unsuitable.

6 After subsection 153(1)

Insert:

(1A) If:

(a) the consumer lease is a consumer lease for household goods;

and

(b) the consumer holds (whether alone or jointly with another

person) an account with an ADI into which income payable

to the consumer is credited;

the licensee must, in verifying the consumer's financial situation

for the purposes of paragraph 151(d), obtain and consider account

statements that cover at least the immediately preceding period of

90 days.

(1B) Subsection (1A) does not limit paragraph (1)(c).

7 At the end of Part 3-4

Add:

Schedule 3

Consumer leases

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

Division 5--Special rules for consumer leases for

household goods

156A Licensee who makes representations about consumer leases

for household goods must display and give information

Requirement

(1) If a licensee represents that the licensee enters into, or is able to

enter into, consumer leases for household goods with consumers

under which the licensee would be the lessor, the licensee must:

(a) display information; and

(b) give information to consumers;

in accordance with any determination made be ASIC under

subsection (2).

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine one or more of the

following matters relating to licensees that make representations

described in subsection (1):

(a) the information that the licensees must display;

(b) how the licensees must display the information;

(d) the information that the licensees must give to consumers;

(e) how the licensees must give the information to consumers;

(f) when the licensees must give the information to consumers.

Offence

(3) 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

Criminal penalty:

50 penalty units.

Consumer leases

Schedule 3

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

156B Licensee must not enter into a consumer lease for household

goods if the payments do not meet the prescribed

requirements

Requirement

(1) A licensee must not enter into, or offer to enter into, a consumer

lease for household goods with a consumer who will be the lessee

under the lease if the amount that would be required to be paid

under the lease by the lessee would not meet the requirements

prescribed by the regulations.

Civil penalty:

5,000 penalty units.

Note:

For example, the regulations may provide that the amount of a

payment must not exceed a specified percentage of the lessee'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

Criminal penalty:

50 penalty units.

Loss of certain fees and charges

(3) If:

(a) the licensee enters into a consumer lease for household goods

in contravention of subsection (1); and

(b) either:

(i) the court has made a declaration that the licensee has

contravened subsection (1) in relation to that consumer

lease; or

(ii) the licensee is found guilty of an offence against

subsection (2) in relation to that consumer lease;

then:

Schedule 3

Consumer leases

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

to pay any amount under that consumer lease that exceeds the

base price of the goods hired under that consumer lease

(whether or not the liability is imposed consistently with the

National Credit Code); and

(d) the lessee may recover as a debt due to the lessee the amount

of any payment made by the lessee that, in accordance with

paragraph (c), the lessee is not liable to pay.

156C Written documentation required in relation to the assessment

for a consumer lease for household goods

(1) If, in an assessment made for the purposes of paragraph 151(c), the

licensee assesses that a consumer lease for household goods is not

unsuitable for a consumer, before:

(a) entering into the consumer lease with the consumer; or

(b) making an unconditional representation to the consumer that

the licensee considers that the consumer is eligible to enter a

consumer lease with the licensee;

the licensee must document in writing and in accordance with any

requirements determined by ASIC under subsection (2):

(d) the inquiries and verification made for the purposes of

paragraph 151(d) in relation to that assessment.

Civil penalty:

5,000 penalty units.

(2) ASIC may, by legislative instrument, determine the form in which

the matters in paragraphs (1)(c) and (d) are to be documented in

writing.

(3) Before making a determination under subsection (2), ASIC must:

(a) consult the Information Commissioner in relation to matters

that relate to the privacy functions (within the meaning of the

Australian Information Commissioner Act 2010

); and

(b) have regard to any submissions made by the Information

Commissioner because of that consultation.

Consumer leases

Schedule 3

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

8 Part 6 of the

National Credit Code

(at the end of the

heading)

Add "

and lessors

9 After subsection 111(2) of the

National Credit Code

Insert:

(2A) For the purposes of this Division, a

key requirement

in connection

with a consumer lease is any one of the requirements of this Code

contained in the following provisions:

(a) subsection 174(1A);

(b) subsection 175AA(1);

(d) section 179VA.

10 Subsections 112(1) and (2) of the

National Credit Code

Repeal the subsections, substitute:

(1) An application for an order under this Division may be made by:

(a) a party to a credit contract or consumer lease; or

(b) a guarantor in relation to a credit contract; or

(2) A debtor, lessee or guarantor may not make an application for an

order under this Division in respect of a contravention in

connection with a contract or consumer lease if the contravention is

or has been subject to an application for an order made by the

credit provider, lessor or ASIC anywhere in Australia under this

Code.

11 Subsection 113(1) of the

National Credit Code

Repeal the subsection (not including the heading), substitute:

(1) The court must, on an application being made, by order declare

whether or not the credit provider or lessor has contravened a key

requirement in connection with the credit contract or contracts

concerned, or consumer lease or leases concerned.

Schedule 3

Consumer leases

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

12 Subsection 113(2) of the

National Credit Code

After "credit provider" (wherever occurring), insert "or lessor".

13 Subsection 113(3) of the

National Credit Code

Repeal the subsection, substitute:

Prudential standing

(3) The court, in considering the imposition of a penalty, must have

regard primarily to the prudential standing of:

(a) any credit provider or lessor concerned; or

(b) any subsidiary of the credit provider or lessor (within the

meaning of the

Corporations Act 2001

);

if the credit provider, lessor or subsidiary takes deposits or is a

borrowing corporation (within the meaning of that Act). However,

the court is to have regard to that prudential standing only if the

credit provider or lessor requests the court to do so.

14 Paragraph 113(4)(a) of the

National Credit Code

Before "the conduct", insert "in the case of a credit contract--".

15 After paragraph 113(4)(a) of the

National Credit Code

Insert:

(aa) in the case of a consumer lease--the conduct of the lessor

and lessee before and after the consumer lease was entered

into;

16 Paragraph 113(4)(c) of the

National Credit Code

After "debtor", insert "or lessee".

17 Paragraphs 113(4)(d), (e) and (f) of the

National Credit

Code

After "credit provider", insert "or lessor".

18 Paragraph 113(4)(g) of the

National Credit Code

Repeal the paragraph, substitute:

Consumer leases

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National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

(g) any action taken by the credit provider or lessor to remedy

the contravention or compensate the debtor or lessee or to

prevent further contraventions;

19 After section 114 of the

National Credit Code

Insert:

114A Penalty if application made by lessee

(1) On application being made by a lessee for an order in relation to a

consumer lease, the maximum penalty that may be imposed by the

court for a contravention of a key requirement is an amount not

exceeding the difference between:

(a) the total amount payable by the lessee under the consumer

lease; and

(b) the base price of the goods hired under the lease.

(2) The court may, however, impose a greater penalty if the lessee

satisfies the court that the lessee has suffered a loss. The amount of

the penalty is to be not less than the amount of the loss.

(3) For the purposes of paragraph (1)(a), the amount payable under a

consumer lease to the extent it relates to amounts payable in the

future is to be calculated on the assumptions in sections 180 and

182.

20 Section 115 of the

National Credit Code

(heading)

After "

debtor

", insert "

, lessee

21 Subsection 115(1) of the

National Credit Code

Repeal the subsection, substitute:

(1) An amount of penalty ordered by the court to be paid may:

(a) if the order was made on an application by a debtor or a

guarantor in relation to a credit contract--be set off by the

debtor or guarantor against any amount that is due or

becomes due to the credit provider under the contract; or

(b) if the order was made on an application by a lessee in relation

to a consumer lease--be set off by the lessee against any

Schedule 3

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National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

amount that is due or becomes due to the lessor under the

lease.

If there is no such amount, the amount of the penalty is a debt due

by the credit provider or lessor to the debtor, lessee or guarantor

22 Subsection 115(3) of the

National Credit Code

Repeal the subsection, substitute:

(3) An order made on application by a debtor, a lessee or a guarantor

may include such directions as the court considers appropriate

relating to the payment of the amount owed by the debtor or lessee,

or the credit provider or lessor, as a result of the order.

23 Sections 116 to 119 of the

National Credit Code

Repeal the sections, substitute:

116 Penalty if application made by credit provider, lessor or ASIC

(1) On application being made by a credit provider, a lessor or ASIC

for an order, the maximum penalty that may be imposed by the

court for a contravention of a key requirement relating to a contract

affected by the application is an amount calculated so that the total

penalty for all contraventions of the requirement in Australia (as

disclosed by the credit provider or lessor) does not exceed 5,000

penalty units.

(2) However, section 167B of the National Credit Act applies in the

same way in relation to the contravention of a key requirement as it

would apply in relation to a civil penalty provision under that Act.

117 Payment of penalty

An amount of penalty ordered by the court to be paid on an

application for an order made by a credit provider, a lessor or

ASIC must be paid by the credit provider or lessor to ASIC on

behalf of the Commonwealth.

118 Compensation for debtor, lessee or guarantor

(1) The court may, on application by a debtor, a lessee or a guarantor,

order that the credit provider or lessor pay to the debtor, lessee or

Consumer leases

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National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

guarantor an amount by way of compensation for loss arising from

the contravention of a key requirement.

(2) The court may only order an amount to be paid by way of

compensation if the debtor, lessee or guarantor satisfies the court

that the debtor, lessee or guarantor has suffered a loss arising from

the contravention. The amount of compensation is not to exceed

the amount of the loss.

(3) The court may not make an order under this section if the debtor,

lessee or guarantor has previously obtained or been refused a

penalty referred to in section 115 relating to the same

contravention.

(4) An amount payable under this section does not affect the amount

of a penalty for the purposes of section 116.

119 General provisions relating to applications by credit providers,

lessors or ASIC

(1) An application for an order by a credit provider, a lessor or ASIC:

(a) may apply to any one or more credit contracts or consumer

leases; and

(b) may apply to all or any class of credit contracts entered into

by the credit provider or lessor during a specified period (for

example, all credit contracts entered into during a specified

period which are affected by a specified contravention).

(2) The court may require notice of any such application to be

published by notice, in a form approved by the court, in a

newspaper circulating throughout one or more States or Territories,

as the court determines.

(3) Notice of an application by a credit provider or lessor must be

given by the credit provider or lessor to ASIC.

24 Section 120 of the

National Credit Code

(at the end of the

heading)

Add "

and lessees

Schedule 3

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National Consumer Credit Protection Amendment (Supporting

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No. , 2020

25 At the end of section 120 of the

National Credit Code

Add "or lessees".

26 Subsection 121(1) of the

National Credit Code

Repeal the subsection, substitute:

(1) The court may, before disposing of an application by a debtor,

lessee or guarantor for an order under this Division, make such

directions as it considers appropriate to protect the interests of the

debtor, lessee or guarantor concerned.

27 Paragraph 121(2)(a) of the

National Credit Code

After "guarantor)", insert ", or the lessee's obligations,".

28 Subsection 121(4) of the

National Credit Code

After "credit provider", insert "or lessor".

29 Subsection 124(1) of the

National Credit Code

After "credit provider" (wherever occurring), insert "or lessor".

30 After subsection 174(1) of the

National Credit Code

Insert:

(1A) A consumer lease for household goods must also contain:

(a) the base price of the goods hired under the consumer lease;

and

(b) the difference between the base price of the goods hired

under the lease and the sum of:

(i) the total amount payable by the lessee in connection

with the lease (including any applicable taxes and any

add-on fees) but not including an amount described in

subsection 175AA(4); and

(ii) the fee or charge (if any) described in

paragraph 175AA(4)(a) (about a single fee or charge

relating to creation of the lease); and

Note:

A penalty may be imposed for contravention of a key requirement in

this subsection: see Part 6.

Consumer leases

Schedule 3

No. , 2020

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Economic Recovery) Bill 2020

31 After section 175A of the

National Credit Code

Insert:

175AA Cap on fees and charges for consumer leases

Overall cap for every consumer lease

(1) A lessor must not enter into, or vary, a consumer lease so that the

total amount that would be payable by the lessee in connection

with the lease (including any applicable taxes and any add-on fees)

is more than the permitted cap for the lease.

Note:

A penalty may be imposed for contravention of a key requirement in

this subsection: see Part 6.

Monthly cap for consumer lease for indefinite period

(2) A lessor must not enter into, or vary, a consumer lease for an

indefinite period so that the total amount that would be payable by

the lessee in connection with the lease (including any applicable

taxes and any add-on fees) in any month is more than

of the

permitted cap for the lease.

Note:

A penalty may be imposed for contravention of a key requirement in

this subsection: see Part 6.

What is an

add-on fee

(3) An

add-on fee

for a consumer lease is any fee or charge (whether

an interest charge or not) for which the following conditions are

met:

(a) the fee or charge is one that:

(i) the lessee is liable to pay to the lessor; or

(ii) the lessee is liable to pay to another person under an

agreement facilitated by or on behalf of the lessor or the

other person;

(b) the fee or charge relates to a service or product that either:

(i) facilitates or complements the lessee's use of the goods

hired under the consumer lease; or

(ii) is marketed or offered by the lessor or another person as

being complementary to the lessee's use of the goods

hired under the consumer lease;

Schedule 3

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National Consumer Credit Protection Amendment (Supporting

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No. , 2020

(i) failure by the lessee to pay the fee or charge, or to

acquire a service or product to which the fee or charge

relates, affects the lessee's rights or obligations under

the consumer lease; or

(ii) the lessor or another person has represented to the lessee

that failure by the lessee to pay the fee or charge, or to

acquire a service or product to which the fee or charge

relates, will or may affect the lessee's rights or

obligations under the consumer lease.

Amounts that do not count against caps

(4) For the purposes of subsections (1) and (2), the following amounts

are not included in the total amount payable by the lessee in

connection with the consumer lease:

(a) a fee or charge that:

(i) relates to the creation of the consumer lease; and

(ii) is charged only once (not on a recurring basis); and

(iii) is not more than 20% of the base price of the goods

hired under the consumer lease;

(b) a fee or charge that is payable in the event of a default in

payment under the consumer lease;

amount which could be recovered by the lessor under

subsection 179R(1).

What is the

permitted cap

(5) The

permitted cap

for a consumer lease is the sum of the following

amounts:

(a) the base price of the goods hired under the consumer lease;

(b) the permitted delivery fee (if any) for the consumer lease;

(d) the amount worked out by multiplying the sum of the

amounts described in paragraphs (a), (b) and (c) by:

(i) in the case of a consumer lease for a fixed term--0.04

for each whole month of the consumer lease to a

maximum of 48 months; or

Consumer leases

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National Consumer Credit Protection Amendment (Supporting

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(ii) in the case of a consumer lease for an indefinite

period--1.92.

What is the

base price

of goods?

(6) The

base price

of the goods hired under a consumer lease is the

amount worked out in accordance with the regulations.

What is a

permitted delivery fee

(7) A fee or charge is a

permitted delivery fee

for a consumer lease if

it:

(a) is for the delivery to the lessee, at the lessee's request, of the

goods hired under the consumer lease; and

(b) is limited to the reasonable cost of delivery of the goods to

the lessee.

What are

permitted installation fees

(8) ASIC may, by legislative instrument, declare that specified fees

which relate to installation of particular kinds of goods hired under

a consumer lease are

permitted installation fees

for the lease.

175AB Imposing fees or charges above the permitted cap--offence

A person commits an offence if:

(a) the person is subject to a requirement under

subsection 175AA(1) or (2); and

(b) the person engages in conduct; and

Criminal penalty:

100 penalty units.

175AC Lessee may recover fees and charges exceeding base price if

cap is breached

If a lessor contravenes subsection 175AA(1) or (2) in relation to a

consumer lease:

(a) the lessee is not liable (and is taken never to have been liable)

to pay any amount under the consumer lease that exceeds the

base price of the goods hired under the consumer lease

Schedule 3

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National Consumer Credit Protection Amendment (Supporting

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(whether or not the liability is imposed consistently with this

Code); and

(b) the lessee may recover as a debt due to the lessee the amount

of any payment made by the lessee that, in accordance with

paragraph (a), the lessee is not liable to pay.

32 Subsection 177B(3)

of the

National Credit Code

(paragraph (a) of the note)

After "such as", insert "family violence,".

33 At the end of Subdivision C of Division 8 of Part 11 of the

National Credit Code

Add:

179GA Limit on amount that may be recovered if there is default

under a consumer lease

(1) If there is a default in payment under a consumer lease and the

regulations prescribe a way of working out a limit on the amount

that may be recovered for the default, the lessor must not recover

more than the limit for the default.

Civil penalty:

5,000 penalty units.

(2) Any provision of the lease that confers a greater right is void to the

extent that it does so. If an amount is in fact recovered in excess of

this limitation, it may be recovered back.

(3) This section does not apply to enforcement expenses.

Note:

Section 179R deals with enforcement expenses.

34 At the end of Division 10 of Part 11 of the

National Credit

Code

Add:

179VA Canvassing of consumer leases for household goods at home

(1) A lessor must not visit (personally or in the person of an employee

or agent) a place of residence for the purpose of inducing a person

who resides there to apply for or obtain a consumer lease for

Consumer leases

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National Consumer Credit Protection Amendment (Supporting

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household goods, except by prior arrangement by the lessor with a

person who resides there.

Criminal penalty:

100 penalty units.

(2) A lessor must not visit (personally or in the person of an employee

or agent) a place of residence for the purpose of inducing a person

who resides there to apply for or obtain a consumer lease for

household goods, except by prior arrangement by the lessor with a

person who resides there.

Criminal penalty:

10 penalty units.

(3) Subsection (2) is an offence of strict liability.

179VB Using postal, telegraphic, telephonic or other like services to

enter into a consumer lease for an indefinite period

Requirement

(1) A lessor must not use postal, telegraphic, telephonic or other like

services (within the meaning of paragraph 51(v) of the

Constitution) to enter into a consumer lease for an indefinite period

if the lessor is not a constitutional corporation.

Civil penalty:

5,000 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

Criminal penalty:

100 penalty units.

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National Consumer Credit Protection Amendment (Supporting

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179VC Entering into a consumer lease for an indefinite period in the

course of constitutional trade and commerce

Requirement

(1) A lessor must not, in the course of constitutional trade and

commerce, enter into a consumer lease for an indefinite period

unless the lessor is a constitutional corporation.

Civil penalty:

5,000 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

Criminal penalty:

100 penalty units.

35 Subsection 204(1) of the

National Credit Code

Insert:

add-on fee

: see subsection 175AA(3).

base price

: see subsection 175AA(6).

consumer lease for household goods

means a consumer lease to

which Part 11 applies where any of the goods hired under the lease

are household goods, but does not include a consumer lease where

the goods hired under the lease include:

(a) motor vehicles; or

(b) vehicles that:

(i) are not for use on a road; and

(ii) are of a kind intended primarily for use by persons with

restricted mobility; or

permanently or temporarily).

Consumer leases

Schedule 3

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National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

credit assistance

has the same meaning as in section 8 of the

National Credit Act.

household goods

means goods of a kind ordinarily acquired for

domestic or household purposes.

36 Subsection 204(1) of the

National Credit Code

(definition

market value

)

After "credit contract", insert "or consumer lease".

37 Subsection 204(1) of the

National Credit Code

Insert:

permitted cap

: see subsection 175AA(5).

permitted delivery fee

: see subsection 175AA(7).

permitted installation fees

: see subsection 175AA(8).

Schedule 4

Avoidance

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

Schedule 4--Avoidance

National Consumer Credit Protection Act 2009

1 Subsection 5(1)

Insert:

avoidance purpose

: see subsection 323A(2).

constitutional corporation

means a corporation to which

paragraph 51(xx) of the Constitution applies.

constitutional trade and commerce

means trade and commerce:

(a) between Australia and places outside Australia; or

(b) between the States; or

(d) between 2 Territories; or

(e) within a Territory.

scheme

means:

(a) any agreement, arrangement, understanding, promise or

undertaking, whether express or implied; or

(b) any scheme, plan, proposal, action, course of action or course

of conduct, whether unilateral or otherwise.

2 Section 323

After:

This Part deals with miscellaneous matters.

insert:

Division 1A has rules that prohibit schemes that are designed to

avoid the application of this Act in relation to small amount credit

contracts and consumer leases.

Avoidance

Schedule 4

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National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

3 After Division 1 of Part 7-1

Insert:

Division 1A--Avoidance schemes

323A Schemes to avoid rules about small amount credit contracts

and consumer leases

General prohibition

(1) A person must not, either alone or with others, engage in any of the

following conduct:

(a) enter into a scheme;

(b) begin to carry out a scheme;

if, having regard to the matters referred to in subsection 323B(1), it

would be reasonable to conclude that the purpose, or one of the

purposes, of the person engaging in that conduct was an avoidance

purpose.

Civil penalty:

5,000 penalty units.

What is an

avoidance purpose

(2) Each of the following is an

avoidance purpose

(a) to prevent a contract from being a small amount credit

contract or a consumer lease;

(b) to cause a contract to cease to be a small amount credit

contract or a consumer lease;

amount credit contract or a consumer lease;

(d) to avoid the application of a provision of this Act to a

contract that has ceased to be a small amount credit contract

or a consumer lease.

Constitutional corporations

(3) A constitutional corporation must not, either alone or with other

persons, engage in any of the following conduct:

Schedule 4

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National Consumer Credit Protection Amendment (Supporting

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No. , 2020

(a) enter into a scheme;

(b) begin to carry out a scheme;

if, having regard to the matters referred to in subsection 323B(1), it

would be reasonable to conclude that the purpose, or one of the

purposes, of the constitutional corporation engaging in that conduct

was an avoidance purpose.

Civil penalty:

5,000 penalty units.

Constitutional trade and commerce

(4) A person must not in the course of constitutional trade and

commerce, either alone or with others, engage in any of the

following conduct:

(a) enter into a scheme;

(b) begin to carry out a scheme;

if, having regard to the matters referred to in subsection 323B(1), it

would be reasonable to conclude that the purpose, or one of the

purposes, of the person engaging in that conduct was an avoidance

purpose.

Civil penalty:

5,000 penalty units.

Use of communications service

(5) A person must not use postal, telegraphic, telephonic or other like

services (within the meaning of paragraph 51(v) of the

Constitution), either alone or with other persons, in order to engage

in any of the following conduct:

(a) enter into a scheme;

(b) begin to carry out a scheme;

if, having regard to the matters referred to in subsection 323B(1), it

would be reasonable to conclude that the purpose, or one of the

purposes, of the person engaging in that conduct was an avoidance

purpose.

Civil penalty:

5,000 penalty units.

Avoidance

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National Consumer Credit Protection Amendment (Supporting

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Prohibitions independent of each other

(6) To avoid doubt, subsections (1), (3), (4) and (5) are independent

from and do not limit each other.

Note:

However, a person can be ordered to pay a pecuniary penalty under

only one of those subsections in relation to the same conduct: see

section 175.

Offence

(7) A person commits an offence if:

(a) the person is subject to a requirement under subsection (1),

(3), (4) or (5); and

(b) the person engages in conduct; and

Criminal penalty:

100 penalty units.

323B Whether it is reasonable to draw conclusion as to purpose

(1) Regard must be had to the following matters in determining for the

purposes of section 323A whether it would be reasonable to

conclude that a purpose of a person (the

first person

) entering into

or carrying out (to any extent) a scheme was an avoidance purpose

relating to a contract:

(a) whether the scheme or the contract was, is or would be:

(i) a means of providing a consumer with credit in a

manner more complex, or more costly to the consumer,

than a small amount credit contract would have been; or

(ii) a means of providing a consumer with financial

accommodation equivalent to providing the consumer

with credit in a manner more complex, or more costly to

the consumer, than a small amount credit contract

would have been; or

(iii) a means of enabling a consumer to have the use of

goods in a manner more complex, or more costly to the

consumer, than a consumer lease would have been;

(b) whether representations were made (by the first person or

anyone else, and whether in an advertisement or otherwise)

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National Consumer Credit Protection Amendment (Supporting

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about the scheme or the contract, or about schemes or

contracts of that kind, that:

(i) were similar to representations made (by the first person

or anyone else, and whether in an advertisement or

otherwise) about small amount credit contracts or

consumer leases; or

(ii) were made to persons in a group similar to a group of

persons to whom representations about small amount

credit contracts or consumer leases were made (by the

first person or anyone else, and whether in an

advertisement or otherwise);

(2) Subsection (1) does not limit the matters to which regard may be

had in making a determination described in that subsection.

323C Presumption of avoidance for certain schemes in civil cases

(1) For the purposes of subsection 323A(1), (3), (4) or (5), it is

reasonable to conclude that a person entered into or carried out a

scheme for an avoidance purpose if:

(a) the scheme is of a kind prescribed by the regulations; or

(b) the scheme is of a kind determined by ASIC under

subsection (3).

(2) A conclusion that this section provides for has effect except so far

as the contrary is proved by the person, having regard to the

matters referred to in subsection 323B(1).

(3) ASIC may, by legislative instrument, determine a scheme, or a

class of schemes, for the purposes of this section.

(4) This section does not have effect for the purposes of

subsection 323A(7).

323D Exemption by ASIC

(1) ASIC may, by legislative instrument, exempt a scheme, or class of

schemes, from all or specified provisions of section 323A.

Schedule 5

Consumer leases for indefinite terms

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

Schedule 5--Consumer leases for indefinite

terms

National Consumer Credit Protection Act 2009

1 Subsection 171(1) of the

National Credit Code

(heading)

Omit "

or indefinite

2 Subsection 171(1) of the

National Credit Code

Omit all the words after "or less".

3 After subsection 171(1) of the

National Credit Code

Insert:

Leases for an indefinite period

(1A) This Part does not apply to a consumer lease for an indefinite

period unless:

(a) the lessor is a constitutional corporation at the time that the

lease is entered into; or

(b) the lease was entered into in the course of constitutional trade

and commerce; or

telephonic or other like services (within the meaning of

paragraph 51(v) of the Constitution).

4 Subsection 175H(1) of the

National Credit Code

Omit "not later than 90 days before the end of the fixed term of a

consumer lease", substitute "by the time specified in subsection (1A)".

5 After subsection 175H(1) of the

National Credit Code

Insert:

(1A) The time by which the statement required by subsection (1) must

be given is:

(a) in the case of a consumer lease for an indefinite period--

before the end of the period of 7 business days after:

Consumer leases for indefinite terms

Schedule 5

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National Consumer Credit Protection Amendment (Supporting

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(i) the lessor receives a request for the statement from the

lessee; or

(ii) if the lessor does not receive such a request before the

consumer lease ends--the day that the consumer lease

ends; or

(b) in the case of a consumer lease for a fixed term--not later

than 90 days before the end of the fixed term of the consumer

lease.

6 Before subsection 179(1) of the

National Credit Code

Insert:

Early termination of consumer leases for fixed terms

7 Subsection 179(1) of the

National Credit Code

After "consumer lease", insert "for a fixed term".

8 After subsection 179(1) of the

National Credit Code

Insert:

Consumer leases for indefinite periods

(1A) A lessee under a consumer lease for an indefinite period may, at

any time, end the lease by returning the goods hired under the lease

to the lessor:

(a) during ordinary business hours; or

(b) at such other time as may be agreed with the lessor or fixed

by the court on the application of the lessee.

9 Before subsection 179(2) of the

National Credit Code

Insert:

Amount payable by lessee on termination

10 Subsection 179(2) of the

National Credit Code

Omit "before the end of its fixed term".

11 Subsection 204(1) of the

National Credit Code

Insert:

Schedule 5

Consumer leases for indefinite terms

National Consumer Credit Protection Amendment (Supporting

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No. , 2020

constitutional corporation

has the same meaning as in section 5 of

the National Credit Act.

constitutional trade and commerce

has the same meaning as in

section 5 of the National Credit Act.

Consequential and other amendments

Schedule 6

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

Schedule 6--Consequential and other

amendments

National Consumer Credit Protection Act 2009

1 Subsection 5(1)

Insert:

constrained document

: see subsection 160CA(1).

hardship notice

has the same meaning as in section 204 of the

National Credit Code.

2 Section 160A (after the paragraph beginning

"Division 2")

Insert:

Division 2A restricts the use and disclosure of certain documents

(including account statements) and of information contained in

those documents.

3 After Division 2 of Part 3-6A

Insert:

Division 2A--Use or disclosure of certain documents

160CA Application of this Division

(1) This Division applies to a person who:

(a) is or was a licensee who has received or obtained a document

(the

constrained document

) that either is an account

statement or is prescribed by the regulations, in connection

with:

(i) a proposed small amount credit contract; or

(ii) a small amount credit contract; or

(iii) a proposed consumer lease for household goods; or

(iv) a consumer lease for household goods; or

Schedule 6

Consequential and other amendments

National Consumer Credit Protection Amendment (Supporting

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No. , 2020

(b) has received or obtained the constrained document from the

person described in paragraph (a).

(2) However, this Division does not apply to a person in relation to a

constrained document about the financial affairs of the person

(either alone or with others).

160CB Prohibition on use or disclosure of constrained documents

Requirement

(1) A person must not use or disclose a constrained document or

information contained in a constrained document.

Civil penalty:

5,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person uses or discloses a document or information; and

(b) the document is a constrained document or the information is

contained in a constrained document.

Criminal penalty:

100 penalty units.

Strict liability offence

(3) A person commits an offence if the person uses or discloses a

constrained document or information contained in a constrained

document.

Criminal penalty:

10 penalty units.

(4) Subsection (3) is an offence of strict liability.

Defence

(5) For the purposes of subsection (1), (2) or (3) it is a defence if the

use or disclosure is:

(a) necessary for the person to comply with the person's

obligations under this Act; or

Consequential and other amendments

Schedule 6

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

(b) required or authorised by or under a law of the

Commonwealth, or of a State or Territory, or a court or

tribunal order; or

(d) for the purposes of assisting ASIC to perform its functions or

exercise its powers; or

(e) for the purposes of allowing the operator of the AFCA

scheme to perform its functions or exercise its powers.

Note:

For the purposes of subsection (2) or (3), a defendant bears an

evidential burden in relation to the matter in subsection (5) (see

subsection 13.3(3) of the

Criminal Code)

4 Section 335A

Repeal the section.

Schedule 7

Application provisions

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

Schedule 7--Application provisions

National Consumer Credit Protection (Transitional and

Consequential Provisions) Act 2009

1 In the appropriate position

Insert:

Schedule 19--Application provisions for the

National Consumer Credit Protection

Amendment (Supporting Economic

Recovery) Act 2020

Part 1--Definitions

1 Definitions

In this Schedule:

amending Act

means the

National Consumer Credit Protection

Amendment (Supporting Economic Recovery) Act 2020

Part 2--Schedule 1 (new regulatory framework) to

the amending Act

2 Application of amendments made by Schedule 1 (other

than those relating to best interests obligations)

Credit assistance and representations

(1)

Subject to item 3, the amendments of the National Credit Act made by

Part 1 of Schedule 1 to the amending Act apply to credit assistance

provided, and representations made, on or after the day that

Part commences, regardless of whether:

(a) the assistance or representations were sought, or commenced

being provided, before, on or after that day; or

(b) the assistance or representations related to a credit contract

entered before, on or after that day.

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No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

Increases in credit limits

(2)

The amendments of the National Credit Act made by Part 1 of

Schedule 1 to the amending Act apply to increasing the credit limit of a

credit contract on or after the day that Part commences, whether the

credit contract is entered before, on or after that day.

Entering a credit contract

(3)

The amendments of the National Credit Act made by Part 1 of

Schedule 1 to the amending Act apply to entering a credit contract on or

after the day that Part commences.

Assessments

(4)

To avoid doubt, sections 120 and 132 of the National Credit Act, as in

force immediately before the day Part 1 of Schedule 1 to the amending

Act commences, continue to apply in relation to assessments and

preliminary assessments made before that day.

3 Application of amendments made by Schedule 1 relating to

best interests obligations

The amendments of Part 3-5A of the National Credit Act by Part 3 of

Schedule 1 to the amending Act apply to credit assistance provided on

or after the day Part 3 of Schedule 1 to the amending Act commences

(whether or not the assistance was sought, or commenced being

provided, before that day).

Part 3--Schedules 2 to 6 (small amount credit

contracts and consumer leases) to the

amending Act

4 Amendments relating to representations and

communications

The amendment or insertion of the following sections of the National

Credit Act, as made by Schedules 2 and 3 to the amending Act, applies

in relation to representations or communications made on or after the

day those Schedules commence:

(a) section 124B;

(b) section 133CB;

Schedule 7

Application provisions

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

(d) section 147A;

(e) section 156A.

5 Amendments relating to assessments

The amendment or insertion of the following sections of the National

Credit Act, as made by Schedules 2 and 3 to the amending Act, applies

in relation to preliminary assessments and assessments made on or after

the day those Schedules commence:

(a) section 124C;

(b) section 133CE;

(d) section 156C.

6 Amendments relating to inquiries and verifications

The amendments of the following sections of the National Credit Act,

as made by Schedule 3 to the amending Act, apply in relation to

verifications made on or after the day that Schedule commences:

(a) section 140;

(b) section 153.

7 Amendments relating to payments required under small

amount credit contracts or consumer leases

The amendment or insertion of the following sections of the National

Credit Act, as made by Schedules 2 and 3 to the amending Act, applies

in relation to small amount credit contracts or consumer leases entered

into or offers made to enter into small amount credit contracts or

consumer leases, on or after the day those Schedules commence:

(a) section 133CC;

(b) section 133CD;

8 Application of Division 1A of Part 7-1 of the National Credit

Act

Division 1A of Part 7-1 of the National Credit Act, as inserted by

Schedule 4 to the amending Act, applies to conduct that:

Application provisions

Schedule 7

No. , 2020

National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

(a) relates to schemes connected with contracts entered into on

or after the day that Schedule commences; and

(b) occurs on or after that day.

9 Application of section 160CB of the National Credit Act

Section 160CB of the National Credit Act, as inserted by Schedule 6 to

the amending Act, applies to uses or disclosures of constrained

documents, or information contained in constrained documents, on or

after the day that Schedule commences.

10 Application of section 31C of the new Credit Code

Section 31C of the new Credit Code, as inserted by Schedule 2 to the

amending Act, applies to small amount credit contracts entered into on

or after the day that Schedule commences.

11 Application of subsection 82(2) of the new Credit Code

Subsection 82(2) of the new Credit Code, as amended by Schedule 2 to

the amending Act, applies in relation to small amount credit contracts

entered into before, on or after the day that Schedule commences.

12 Amendments relating to consumer leases

--new Credit

Code

(1)

The amendment or insertion of the following sections of the new Credit

Code, as made by Schedules 3 and 5 to the amending Act, applies in

relation to consumer leases entered into on or after the day those

Schedules commence:

(a) section 111;

(b) section 112;

(d) section 114A;

(e) section 115;

(f) section 116;

(g) section 117;

(h) section 118;

(i) section 119;

(j) section 120;

(k) section 121;

Schedule 7

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National Consumer Credit Protection Amendment (Supporting

Economic Recovery) Bill 2020

No. , 2020

(l) section 124;

(m) section 171;

(n) section 174;

(o) section 175AA;

(p) section 175AC;

(q) section 175H;

(r) section 179;

(s) section 179GA;

(t) section 179VB;

(u) section 179VC.

(2)

The insertion of sections 175AA and 175AC of the new Credit Code, as

made by Schedule 3 to the amending Act, also applies in relation to the

variation on or after the day that Schedule commences of consumer

leases (whether entered into before, on or after that day).

13 Application of section 179VA of the new Credit Code

Section 179VA of the new Credit Code, as inserted by Schedule 3 to the

amending Act, applies to a visit made on or after the day that Schedule

commences.

Commonwealth of Australia Bills

NATIONAL CONSUMER CREDIT PROTECTION AMENDMENT (SUPPORTING ECONOMIC RECOVERY) BILL 2020