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National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill 2011

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2010-2011

 

The Parliament of the

Commonwealth of Australia

 

HOUSE OF REPRESENTATIVES

 

 

 

National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill 2011

 

 

(1)     Clause 2, page 2 (table item 2), omit the table item, substitute:

2.  Schedule 1, Part 1

1 January 2012.

1 January 2012

[commencement of key facts sheet for standard home loans]

(2)     Schedule 1, item 5, page 6 (lines 11 to 19), omit subsections 133AC(4) and (5).

[omission of some strict liability offences]

(3)     Schedule 1, item 7, page 10 (lines 7 to 10), omit the item.

[use of credit card in excess of credit limit]

(4)     Schedule 1, item 11, page 10 (lines 21 to 23), omit the item.

[use of credit card in excess of credit limit]

(5)     Schedule 1, item 13, page 11 (lines 1 to 4), omit the item.

[use of credit card in excess of credit limit]

(6)     Schedule 1, item 16, page 11 (lines 14 to 17), omit the item.

[use of credit card in excess of credit limit]

(7)     Schedule 1, item 19, page 12 (lines 16 to 18), omit all the words from and including “Division 5” to and including “fees etc.”, substitute “Division 5 provides for consumers to be notified if a credit card is used in excess of its credit limit, and restricts the charging of fees etc. for use of a credit card in excess of its credit limit.”.

[use of credit card in excess of credit limit]

(8)     Schedule 1, item 19, page 15 (line 32) to page 16 (line 7), omit subsections 133BD(3) and (4).

[omission of some strict liability offences]

(9)     Schedule 1, item 19, page 19 (line 20) to page 24 (line 30), omit Division 5, substitute:

Division 5 Use of credit card in excess of credit limit

133BH   Credit provider to notify consumer of use of credit card in excess of credit limit

Regulations may require licensee to notify consumer of use of credit card in excess of credit limit

             (1)  The regulations may require a licensee who is the credit provider under a credit card contract to notify the consumer who is the debtor under the contract if the licensee becomes aware that the debtor has used a credit card that is linked to the contract to obtain cash, goods or services in excess of the credit limit for the contract.

             (2)  Without limiting subsection (1), regulations made for the purpose of that subsection may deal with:

                     (a)  how and when the licensee must notify the consumer; and

                     (b)  the matters that must be included in the notification.

Requirement to comply with the regulations

             (3)  A licensee must comply with regulations made for the purpose of subsection (1).

Civil penalty:          2,000 penalty units.

Offence

             (4)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (3); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    50 penalty units.

133BI   Credit provider not to impose fees etc. because credit card used in excess of credit limit

             (1)  If a credit card is used to obtain cash, goods or services in excess of the credit limit for the credit card contract, the licensee who is the credit provider under the contract must not, because the credit limit was exceeded, impose any liability to pay fees or charges, or a higher rate of interest, on the consumer who is the debtor under the contract unless:

                     (a)  the licensee has, in accordance with this section, obtained express consent from the consumer covering the imposition of the fees or charges, or the higher rate of interest; and

                     (b)  the consent has not been withdrawn; and

                     (c)  any other requirements prescribed by the regulations are complied with.

Note 1:       The consent must be express, and cannot be implied from the actions of the consumer or from other circumstances.

Note 2:       The licensee must keep records of consents and withdrawals: see section 133BJ.

             (2)  The consumer may consent to the licensee imposing a liability to pay fees or charges, or a higher rate of interest, if the credit card is used to obtain cash, goods or services in excess of the credit limit.

             (3)  Before obtaining the consumer’s consent, the licensee must, in accordance with the regulations, inform the consumer of any matters prescribed by the regulations.

             (4)  The consent may be obtained before or after the credit card contract is entered into, but it does not cover any fees, charges or interest imposed before the consent is obtained.

             (5)  The consumer may withdraw the consent at any time.

             (6)  The regulations may prescribe requirements to be complied with in relation to giving consent under subsection (2), or withdrawing consent under subsection (5).

             (7)  For the purpose of subsection 23(1) of the National Credit Code (and the other provisions of the Code that refer to, or apply in relation to, that subsection):

                     (a)  a liability to pay a fee or charge that is imposed contrary to subsection (1) of this section is taken to be a credit fee or charge that is prohibited by the Code; and

                     (b)  a liability to pay interest that is imposed contrary to subsection (1) of this section is taken to be an interest charge under the credit card contract exceeding the amount that may be charged consistently with the Code.

Note:          For the civil and criminal consequences of contravening subsection 23(1) of the National Credit Code, see subsections 23(2) to (4), section 24, and Part 6, of the Code.

133BJ   Records of consents and withdrawals to be kept

Requirement

             (1)  A licensee must, in accordance with the requirements prescribed by the regulations, keep a record of:

                     (a)  consents the licensee obtains under section 133BI; and

                     (b)  withdrawals of such consents.

Civil penalty:          2,000 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

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    50 penalty units.

[use of credit card in excess of credit limit]

(10)   Schedule 1, item 21, page 27 (lines 25 to 27), omit note 2, substitute:

Note 2:       This subsection also applies to liabilities imposed contrary to section 133BI of the National Credit Act: see subsection (7) of that section.

[use of credit card in excess of credit limit]

(11)   Schedule 2, item 1, page 30 (line 10), after “ Application ”, insert “ and Transitional ”.

[pre-commencement consents for credit limit increase invitations]

(12)   Schedule 2, item 1, page 30 (after line 25), at the end of Part 1 of Schedule 4, add:

3  Pre-commencement consents for credit limit increase invitations

(1)       Subject to subitem (2), if:

                     (a)  before commencement, a licensee who is the credit provider under a credit card contract obtained express consent, from the consumer who is the debtor under the contract, to the licensee making credit limit increase invitations; and

                     (b)  the consent is expressed to relate to any credit limit increase invitations that the licensee may, from time to time, make to the consumer; and

                     (c)  before obtaining the consumer’s consent, the licensee informed the consumer of the matters mentioned in paragraphs 133BF(4)(a), (b) and (c) of the amended Act; and

                     (d)  the consumer did not withdraw the consent before commencement;

then, for the purposes of Division 4 of Part 3-2B of the amended Act, the licensee is taken to have obtained the consent under, and in accordance with, section 133BF of the amended Act.

Note:       The consumer may, after commencement, withdraw the consent in accordance with section 133BF of the amended Act.

(2)       Section 133BG of the amended Act does not apply in relation to the consent, so far as that section would otherwise require a record of the consent to be kept. However that section does apply in relation to a withdrawal of the consent after commencement.

[pre-commencement consents for credit limit increase invitations]