National Consumer Credit Protection Amendment (Low Cost Credit) Regulations 2025 (F2025L00303)

Schedule 1   Amendments

Part 1   Main amendments

National Consumer Credit Protection Regulations 2010

4   After Part 3-4

Insert:

Part 3-4A - Additional rules relating to low cost credit contracts

Division 1 - Preliminary

28HAA Scope of this Part

This Part:

(a) applies to a licensee if the licensee has made an election under subsection 133BXA(1) of the Act and has not revoked the election; and

(b) applies to such a licensee in relation to a credit contract if the credit contract is a low cost credit contract covered by the election.

Note: Under subsection 133BXA(1) of the Act, a licensee may elect that Part 3-2BA of the Act apply to the licensee in relation to some or all low cost credit contracts.

28HAB Definitions

In this Part:

unsuitability assessment policy has the same meaning as in the Act.

Division 2 - Unsuitable low cost credit contracts

28HAC When inquiries etc. must be made

For the purposes of paragraph 133BXB(b) of the Act, the prescribed period is 120 days.

28HAD Inquiries about financial situation of consumer

(1) For the purposes of subsection 130(2) of the Act, this regulation prescribes inquiries that a licensee must make for the purposes of paragraph 130(1)(b) of the Act before making an assessment of whether a low cost credit contract will be unsuitable for a consumer if the contract is entered, or the credit limit of the contract is increased, in the period covered by the assessment.

Credit information

(2) If the consumer is an individual, the licensee must seek to obtain from a credit reporting body the following information about the consumer:

(a) the information mentioned in subsection (3);

(b) the information mentioned in subsection (4), but only if when the contract is entered or after the credit limit is increased (whichever applies) the sum of:

(i) the value of the low cost credit contract; and

(ii) the value of each other low cost credit contract the consumer has already entered into with the licenseeand that is still in force;

will be $2,000 or greater.

(3) The information is any information of the following kinds held by the body:

(a) identification information (within the meaning of the Privacy Act 1988) about the individual;

(b) details of any information requests (within the meaning of the Privacy Act 1988) that have been made in relation to the individual;

(c) default information (within the meaning of subsection 6Q(1) or (2) of the Privacy Act 1988) about the individual;

(d) payment information (within the meaning of the Privacy Act 1988) about the individual;

(e) personal insolvency information (within the meaning of the Privacy Act 1988) about the individual;

(f) information about the individual that is information covered by paragraph 6N(k) of the Privacy Act 1988 (which covers certain kinds of publicly available information);

(g) new arrangement information (within the meaning of the Privacy Act 1988) about the individual;

(h) court proceedings information (within the meaning of the Privacy Act 1988) about the individual.

Note: Under subsection 5(1) of the Act, credit reporting body has the same meaning as in the Privacy Act 1988.

(4) The information is information about consumer credit (within the meaning of the Privacy Act 1988) provided to the individual that is consumer credit liability information (within the meaning of that Act) about the individual.

(5) To avoid doubt, nothing in this regulation requires or authorises a credit reporting body to disclose information referred to in subsections (3) or (4) to a licensee.

Other information

(6) The licensee must also seek to obtain information that the licensee reasonably believes to be substantially correct about the following:

(a) the income of the consumer;

(b) the expenditure of the consumer;

(c) any low cost credit contracts, small amount credit contracts or consumer leases to which the consumer is currently a party.

Division 3 - Unsuitability assessment policies

28HAE Authority for this Division

This Division is made for the purposes of subsection 133BXG(3) of the Act.

28HAF Reviewing and updating unsuitability assessment policies

(1) A licensee must conduct regular reviews of the licensee's unsuitability assessment policy.

(2) In deciding when to conduct a review of the policy, the licensee must have regard to the licensee's obligations under subsection 133BXG(2) of the Act (unsuitability assessment policy must be effective).

(3) As part of each review, the licensee must:

(a) assess whether the policy has been and will continue to be one that, if followed, makes it reasonably likely that the licensee will comply with sections 128 and 131 of the Act (which deal with assessments of unsuitability), as those sections apply in relation to low cost credit contracts; and

(b) identify any changes to the policy that would make it more likely that, if the policy is followed, the licensee will comply with those sections, as they apply in relation to low cost credit contracts.

(4) For each review, the licensee must ensure that the licensee has regard to information and evidence that the licensee reasonably believes:

(a) is accurate; and

(b) provides an appropriate basis for assessing the policy as mentioned in paragraph (3)(a) and identifying changes to the policy as mentioned in paragraph (3)(b).

(5) If, as part of a review, the licensee identifies changes to the policy of the kind mentioned in paragraph (3)(b), the licensee must ensure that the policy is revised to incorporate those changes as soon as is practicable.