National Consumer Credit Protection Amendment Regulations 2011 (No. 6)1
Select Legislative Instrument 2011 No. 201
I, QUENTIN BRYCE, Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the National Consumer Credit Protection Act 2009.
Dated 3 November 2011
QUENTIN BRYCE
Governor-General
By Her Excellency’s Command
WAYNE SWAN
Treasurer
1              Name of Regulations
                These Regulations are the National Consumer Credit Protection Amendment Regulations 2011 (No. 6).
2              Commencement
                These Regulations commence on the commencement of Part 2 of Schedule 1 to the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Act 2011.
3              Amendment of National Consumer Credit Protection Regulations 2010
                Schedule 1 amends the National Consumer Credit Protection Regulations 2010.
Schedule 1        Amendments
(regulation 3)
 
[1]           After regulation 28J
insert
28JA       Inquiries about credit limit
                For paragraph 130 (1) (d) of the Act, a licensee must make reasonable inquiries about the maximum credit limit that a consumer requires.
[2]           After regulation 28LE
insert
28LFA    Key Facts Sheets
         (1)   For section 133BB of the Act, Schedule 6 sets out:
                (a)    the Key Facts Sheet for a credit card contract; and
               (b)    requirements for how the information in a Key Facts Sheet is to be prepared.
         (2)   A Key Facts Sheet is taken to comply with Schedule 6 if:
                (a)    it does not refer to a term or condition that is, or may, only be available to a particular class of consumer; and
               (b)    the term or condition does not cause the consumers in that class to be worse off than they would be under the terms and conditions described in the Key Facts Sheet.
Example
A licensee makes a special promotional offer to customers who have a home loan with the licensee. The terms and conditions of the credit card contract under the offer are more advantageous than the terms and conditions of the credit card contract as described in the Key Facts Sheet.
It would be difficult to provide a new Key Fact Sheet for each promotional offer of this kind.
28LF       Circumstances in which application form may include out-of-date Key Facts Sheet
         (1)   For subsection 133BC (3) of the Act, a circumstance in which a licensee may make available an application form that includes a Key Facts Sheet, containing information that has ceased to be up-to-date, is that the information ceased to be up-to-date no more than 3 months before the day on which the licensee makes the application form available.
         (2)   If the licensee makes the application form available by means that are under the licensee’s control, the period for which the licensee may make the application form available is 3 months after the day on which the information ceased to be up-to-date.
         (3)   For subsection 133BC (3) of the Act, a circumstance in which a licensee may make available an application form that includes a Key Facts Sheet, containing information that has ceased to be up-to-date, is that:
                (a)    the application form forms part of an advertisement in a publication published by a third party who is authorised to act for the licensee; and
               (b)    the licensee approved the application form for publication by the third party; and
                (c)    the information in the Key Facts Sheet was up to date when the licensee approved the application form for publication; and
               (d)    the expected date of publication of the advertisement was less than 30 days after the licensee approved the application form for publication.
28LG      Circumstances in which up-to-date information can be provided otherwise than in Key Facts Sheet
                For subparagraph 133BD (1) (b) (ii) of the Act, a requirement for the provision of up-to-date information to a consumer if a Key Facts Sheet contains information that has ceased to be up-to-date is that the licensee provides the up-to-date information no later than the time at which the licensee provides the consumer with the credit card to which the Key Facts Sheet related.
28LH      Meaning of credit limit increase invitation
         (1)   For subsection 133BE (6) of the Act, a written communication is covered by the definition of credit limit increase invitation in subsection 133BE (5) of the Act if it:
                (a)    includes a proposed credit limit that is higher than the consumer’s existing credit limit; or
               (b)    suggests that a higher credit limit may benefit the consumer.
         (2)   For subsection 133BE (6) of the Act, a written communication is not covered by the definition of credit limit increase invitation in subsection 133BE (5) of the Act if it only provides generic information about credit limits that is applicable to each consumer who is a party to a credit card contract with the licensee.
Note   Subsection 133BE (6) of the Act provides that regulations may make provisions that apply to determining whether a written communication is covered by the definition of credit limit increase invitation in subsection 133BE (5).
28LI        Giving consent to receive credit limit increase invitations
         (1)   For subsection 133BF (7) of the Act, a requirement to be complied with is that, if consent to a licensee making credit limit increase invitations is to be provided in response to a written communication from the licensee, the written communication:
                (a)    must seek the consumer’s consent only in relation to whether or not to receive credit limit increase invitations; and
               (b)    must set out the matters mentioned in subsection 133BF (4) of the Act in a way that would allow a reasonable person to conclude that the consumer was aware of those matters when the consumer gave consent.
         (2)   For subsection 133BF (7) of the Act, a requirement to be complied with in relation to withdrawing consent to a licensee making credit limit increase invitations is that if:
                (a)    the licensee has arranged for a credit limit increase invitation (the current invitation) to be sent to a consumer in accordance with the consumer’s consent; and
               (b)    the consumer withdraws his or her consent after the arrangements have been made; and
                (c)    it would be unreasonable to stop the current invitation from being sent to the consumer;
the withdrawal of the consumer’s consent is to be treated as not applying to the current invitation.
28LJ       Licensee to notify consumer of use of credit card in excess of credit limit
         (1)   For subsection 133BH (1) of the Act, a licensee who is the credit provider under a credit card contract must take reasonable steps to notify the consumer who is the debtor under the contract if the licensee becomes aware that the consumer has used a card in excess of the credit limit for the contract.
         (2)   The licensee must notify the consumer not later than 2 business days after the day on which the licensee becomes aware that the consumer has used the card in excess of the credit limit for the contract.
         (3)   However, if:
                (a)    the consumer pays the amount by which the credit limit has been exceeded within 2 business days after the day on which the balance under the credit card contract first exceeds the credit limit; and
               (b)    the licensee has not already notified the consumer when the amount is paid;
the licensee is not required to notify the consumer.
         (4)   The licensee is only required to notify the consumer once during a statement period.
         (5)   The licensee must include in the notification under subregulation (2) information about exceeding the credit limit that is sufficient to lead a reasonable consumer to check the balance under his or her credit card contract.
28LK      Fees charges and higher rates of interest
                For paragraph 133BI (1) (c) of the Act, if a licensee provides a form to allow a consumer to consent to have fees, charges or a higher rate of interest charged on a credit card that is used in a way mentioned in subsection 133BI (1) of the Act, the licensee must ensure that the invitation to give consent:
                (a)    allows the consumer to withdraw the consent; and
               (b)    discloses any fee charged in relation to the consumer’s consent; and
                (c)    discloses the fee, charge or higher rate of interest that will be charged on the credit card if it is used in the way mentioned in subsection 133BI (1) of the Act; and
               (d)    explains that the fee may increase at any time, in accordance with the terms of the credit card contract; and
                (e)    explains that fees, charges or a higher rate of interest may be charged on the credit card for the amount by which the balance under the credit card contract exceeds the credit limit; and
                (f)    explains that fees, charges or a higher rate of interest are likely to be charged on the credit card for the statement period in which the credit card was used in a way mentioned in subsection 133BI (1) of the Act.
28LL       Records of elections and withdrawals to be kept
         (1)   For paragraph 133BJ (1) (a) of the Act, if a consumer in relation to a credit card contract has:
                (a)    given a consent covering the imposition of fees or charges, or a higher rate of interest, in relation to the contract; or
               (b)    withdrawn a consent of that kind;
the licensee in relation to the contract must keep a record stating that a consent or withdrawal is current and showing the date on which the consent was given or withdrawn.
Note   The consent is described in detail in section 133BI of the Act.
         (2)   The licensee must keep the record for the period during which the consent or withdrawal is in effect.
28LM      Agreement to apply payment against particular amount owed
                For subsection 133BP (5) of the Act, a licensee that proposes to agree to a request by a consumer to apply certain payments made under the credit card contract against a particular amount must, before agreeing to the request, advise the consumer that the consumer:
                (a)    may be liable to pay an amount or rate of interest under the agreement that is greater than the consumer would be liable to pay under subsection 133BQ of the Act; and
               (b)    may withdraw the request at a later time.
28LN      Modification — Divisions 5 and 6 of Part 3-2B
                For paragraph 164 (d) of the Act, the provisions to which Part 3-7 of the Act applies apply as if Divisions 5 and 6 of Part 3-2B of the Act, as amended by Part 2 of Schedule 1 to the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Act 2011, were modified so that:
                (a)    they apply to a credit card contract entered into after the commencement of Part 2 of Schedule 1 to the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Act 2011 (the commencement); and
               (b)    they do not apply to a credit card contract under which a licensee has provided a consumer with a credit card, in the period of 90 days immediately before the commencement, for the purpose of entering a credit contract that is formed or entered by:
                          (i)    the use by a consumer of the credit card to obtain credit from the licensee; or
                         (ii)    the activation by a consumer of the credit card by arrangement with the licensee.
[3]           After regulation 79A
insert
79B         Minimum Repayment Warning
         (1)   For subsection 34 (12) of the Code, a statement of account must contain, on the front page of the statement, the warning and details mentioned in subregulation (2).
         (2)   The warning and details must be in the following form:
                Minimum Repayment Warning: If you make only the minimum payment each month, you will pay more interest and it will take you longer to pay off your balance. For example:
If you make no additional charges using this card and each month you pay ...
You will pay off the Closing Balance shown on this statement in about ...
And you will end up paying an estimated total of ...

Only the minimum payment
[period]
[total interest 1]

[repayment 2]
2 years
[total interest 2], a saving of [savings 2]

                Having trouble making repayments? If you are having difficulty making credit card repayments, please contact us on [phone number]. We may be able to assist you.
         (3)   If the time to pay off the closing balance, making only the minimum payment each month, is 2 years or less, the item for [repayment 2] in the table in the Minimum Payment Warning is not required.
         (4)   [Period] must be calculated on the assumption that:
                (a)    the borrower pays the amount of the minimum payment mentioned in the statement of account each month; and
               (b)    no other purchases or advances are added to the outstanding balance.
         (5)   If more than one interest rate applies, the licensee may elect to use the purchase rate as the applicable rate to be applied to the whole of the outstanding balance.
Note   The tolerances and assumptions in section 180 of the Code will apply to the calculation.
         (7)   In this regulation:
[date] means the repayment due date.
[late fee] means any fee under the credit card contract for not making the repayment by the due date.
[penalty interest] means the interest that applies if the minimum repayment has not been paid by the due date.
[period] means the time, in years and months, needed to repay the closing balance, making the minimum repayment each month until the balance is repaid.
purchase rate means the rate which applies to the purchase of goods and services under the credit card contract.
[repayment 2] means the monthly repayment required to pay off the closing balance in 2 years.
[savings 2] is the difference between [total interest 1] and [total interest 2].
[total interest 1] means the total interest payable if the customer is making the minimum repayment each month until the balance is repaid.
[total interest 2] means the total interest that the consumer would be charged if the consumer made payments of [repayment 2] to pay off the closing balance in 2 years.
[4]           Schedule 5, Part 2, item 2.1, note 5
substitute
                  5    This is the current interest rate applicable to the loan on the date on which the Key Facts Sheet is produced.
                        If discounts to this interest rate apply, the discount and the period in which it will apply must also be disclosed here.
                        Only one of the 4 paragraphs in this box is required. Omit the paragraphs that do not apply to the loan this Key Facts Sheet relates to.
                        A licensee may replicate this item if more than 1 discount period applies
[5]           Schedule 5, Part 2, item 2.1, notes 13 and 14
substitute
                13    This is the sum of amounts payable per month on the home loan and any fees paid to the lender that are charged in that month.
                14    This is the sum of the amounts payable per year on the home loan and any fees paid to the lender that are charged during the year.
[6]           After Schedule 5
insert
Schedule 6        Key Facts Sheets for credit card contracts
(regulation 28LFA)
Part 1          Model of Key Facts Sheets
Key facts about this credit card

Correct as at: [date on which
Key Facts Sheet is produced]
Lender’s logo and/or name


This information sheet is an Australian Government requirement under the National Consumer Credit Protection Act 2009


Description of credit card

Product name
[name of credit card product]

Minimum credit limit
[minimum credit limit]

Minimum repayments 1
[minimum repayment or how the minimum repayment will be calculated]

Interest on purchases
[interest rate payable on purchases]

Interest-free period 2
[description of interest-free period]

Interest on cash advances
[interest payable on cash advances]

Promotional interest rate 3
[promotional interest rate]

Balance transfer interest rate 3
[interest rate payable on transferred balances and (if applicable) the number of months for which the rate is applicable]

Annual fee
[annual fee]

Late payment fee
[late payment fee]

There may be circumstances in which you have to pay other fees. A full list of current fees applicable to this credit card can be obtained from [web address for lender’s fees page].
For more information on choosing and using credit cards visit the ASIC consumer website at www.moneysmart.gov.au
The information on this sheet may be out of date. To confirm this information is correct you may wish to visit [web address for lender’s website].


Notes for using model
1    Minimum repayments may be expressed as amounts or as an explanation of how minimum repayments will be calculated.
2    The expression ‘interest free’ must be used in accordance with section 30B of the Credit Act and the regulations made under that section.
3    This item may be omitted if it is not relevant or applicable to the credit card contract.
Part 2          Information about preparing a Key Facts Sheet
Notes for using model of Key Facts Sheet
2.1           The notes for using the model Key Facts Sheet in Part 1 are to be deleted from a Key Facts Sheet provided to a consumer.
Key Facts Sheet for more than one credit card
2.2           A licensee may publish a Key Facts Sheet about more than one credit card in a table format by adding columns to the right of the tables in the model Key Facts Sheet in Part 1. If the licensee does so, the Key Facts Sheet provided to a consumer must enable the consumer to clearly identify or select each credit card for which the consumer is applying.
Publication online
2.3           If a Key Facts Sheet is published online, links must be provided to the websites mentioned in the Key Facts Sheet.
Note
1.       All legislative instruments and compilations are registered on the Federal Register of Legislative Instruments kept under the Legislative Instruments Act 2003. See http://www.frli.gov.au.