National Consumer Credit Protection Amendment (Small Amount Credit Contracts) Regulation 2014
 
Select Legislative Instrument No. 89, 2014
I, General the Honourable Sir Peter Cosgrove AK MC (Ret’d), Governor‑General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following regulation.
Dated 12 June 2014
Peter Cosgrove
Governor‑General
By His Excellency’s Command
Mathias Cormann
Minister for Finance
for the Treasurer
  
  
Contents
1............ Name of regulation.............................................................................. 1
2............ Commencement................................................................................... 1
3............ Authority............................................................................................. 1
4............ Schedule(s)......................................................................................... 1
Schedule 1—Amendments                                                                                                2
National Consumer Credit Protection Regulations 2010                                   2
 
1  Name of regulation
                   This regulation is the National Consumer Credit Protection Amendment (Small Amount Credit Contracts) Regulation 2014.
2  Commencement
                   This regulation commences on the day after it is registered.
3  Authority
                   This regulation is made under the National Consumer Credit Protection Act 2009.
4  Schedule(s)
                   Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.
Schedule 1—Amendments
  
National Consumer Credit Protection Regulations 2010
1  After regulation 4
Insert:
4D  Small amount credit contracts—credit limit increase to cover fees
                   The credit limit set out in paragraph (c) of the definition of small amount credit contract in subsection 5(1) of the Act is increased by the amount of each of the following as included in the amount of credit to be provided under the contract:
                     (a)  the permitted establishment fee for the contract;
                     (b)  the first permitted monthly fee payable under the contract.
Note 1:       Section 31A of the Code deals with the fees and charges that can be imposed under a small amount credit contract.
Note 2:       While this regulation could raise a credit limit to a maximum of $2,480, no more than $2,000 would be available to the consumer under the contract.
2  After regulation 50
Insert:
50A  Exemption for short term credit
                   For paragraph 6(1)(b) of the Code:
                     (a)  credit fees and charges imposed or provided for under a contract are taken to include a fee or charge specified in the following table if the fee or charge is a credit fee or charge within the meaning of the definition of credit fees and charges in section 204 of the Code; and
                     (b)  the fee or charge is taken to be included whether or not it is payable under the contract.
 
Fees and charges

Item
Fee or charge

1
A fee or charge payable in connection with the supply of the amount of credit provided under the contract.

2
A fee or charge payable in connection with the consumer receiving an amount of credit provided, under the contract, as cash or by transfer to an account.

3
A fee or charge payable in connection with the management or repayment of the amount of credit provided under the contract.

 
Example 1: A fee for providing the credit through a stored value card.
Example 2: A fee or charge for obtaining a membership (however described) which is a prerequisite to the debtor obtaining access to a service to receive funds paid by cheque as cash (whether or not with other services).
Example 3: Account keeping fees (however described).
3  Regulation 51
Repeal the regulation, substitute:
51  Exempt credit—maximum account charges
                   For subsection 6(5) of the Code, the prescribed maximum charge in relation to a continuing credit contract is specified in the following table.
 
Prescribed maximum charge

Item
If ...
the prescribed maximum charge is ...

1
the debtor is not already a party to a continuing credit contract with the credit provider, or an associate of the credit provider, when the continuing credit contract is entered into
(a) for the period of 12 months commencing when the debtor enters into the continuing credit contract—$200; and
(b) for any subsequent period of 12 months during which the continuing credit contract is in effect—$125.

2
both of the following apply when the continuing credit contract (the new contract) is entered into:
(a) the debtor is already a party to a continuing credit contract with the credit provider, or an associate of the credit provider, or was such a party within the previous 12 months;
(b) neither the credit provider nor the associate of the credit provider is an ADI
(a) for the period of 12 months commencing when the debtor enters into the new contract—nil; and
(b) for any subsequent period of 12 months during which the new credit contract is in effect—nil.

 
Note:          Subsection 6(5) of the Code provides that the Code does not apply to the provision of credit under a continuing credit contract if the only charge that is or may be made for providing the credit is a periodic or other fixed charge that does not vary according to the amount of credit provided. However, the Code applies if the charge exceeds the maximum charge (if any) prescribed by the regulations.
4  After regulation 79A
Insert:
79AE  Small amount credit contracts (fees and charges)—prescribed persons
                   For subsection 31B(1) of the Code, a person specified in the following table is a prescribed person.
 
Prescribed persons

Item
Person

1
A person who introduces a debtor to a credit provider (whether or not the person is associated with the credit provider).

2
A person who has been introduced to a debtor by a credit provider to provide a service in relation to a small amount credit contract (whether or not the person is associated with the credit provider).

 
Note:          Section 31B of the Code relates to fees and charges in relation to:
(a)    a small amount credit contract; or
(b)    the provision of an amount of credit under a small amount credit contract; or
(c)    a thing that is connected with a small amount credit contract or the provision of an amount of credit under such a contract.
                   Section 31B of the Code applies to a credit provider or a person prescribed by the regulations.