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National Consumer Credit Protection Act 2009

CHAPTER 3 - RESPONSIBLE LENDING CONDUCT

PART 3-2BA - LICENSEES THAT ARE CREDIT PROVIDERS UNDER CREDIT CONTRACTS: ADDITIONAL RULES RELATING TO LOW COST CREDIT CONTRACTS

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History

Pt 3-2BA inserted by No 138 of 2024, s 3 and Sch 2 [ 14 ] , effective 10 June 2025. No 138 of 2024, s 3 and Sch 2 [ 18 ] contains the following application provision:

18 Application provision - Part 3-2BA of the Act
Elections

(1)
A licensee may, under subsection 133BXA(1) of the National Consumer Credit Protection Act 2009 (the Act ), make an election that covers a low cost credit contract whether the contract was entered into before, on or after the time (the commencement time ) when this Part commences.

When inquiries etc. must be made

(2)
Section 133BXB of the Act applies for the purposes of applying section 128 of the Act in relation to conduct mentioned in paragraph 128(a) , (aa) , (b) or (ba) of the Act that occurs on or after the commencement time.

(3)
To avoid doubt, a period of 90 days mentioned in paragraph 133BXB(b) of the Act may start before, on or after the commencement time.

When inquiries etc. are reasonable

(4)
Section 133BXC of the Act applies in relation to:
(a) conduct mentioned in paragraph 133BXC(1)(a) or (b) of the Act that occurs on or after the commencement time; and
(b) determining whether a licensee has done a thing mentioned in paragraph 133BXC(2)(a) , (b) or (c) of the Act, whether that thing is done before, on or after the commencement time.

Assessments etc. in relation to larger contracts

(5)
Subsection 133BXD(2) of the Act applies in relation to entering a low cost credit contract if:
(a) the contract is entered on or after the commencement time; and
(b) the assessment, and the inquiries and verification, mentioned in that subsection are made on or after the commencement time.

(6)
Subsections 133BXD(3) to (6) of the Act apply:
(a) in relation to entering a low cost credit contract, as mentioned in paragraph 133BXD(3)(a) of the Act, if:

(i) the contract is entered on or after the commencement time; and

(ii) the assessment, and the inquiries and verification, mentioned in that paragraph are made on or after the commencement time; and

(b) in relation to an increase to the credit limit of a low cost credit contract, as mentioned in subsection 133BXD(4) of the Act, if the increase occurs on or after the commencement time.

Presumptions

(7)
Section 133BXE of the Act applies in relation to assessments mentioned in subsection 131(1) of the Act that are made on or after the commencement time.

(8)
Section 133BXF of the Act applies in relation to conduct mentioned in paragraph 133(1)(a) or (b) of the Act that occurs on or after the commencement time.

Division 2 - Unsuitable low cost credit contracts

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SECTION 133BXE ASSESSMENTS OF LOW COST CREDIT CONTRACTS - PRESUMPTIONS WHERE CREDIT LIMIT OF CONTRACT NOT ABOVE THRESHOLD AMOUNT

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133BXE(1)
This section applies when determining, for the purposes of subsection 131(1) , whether a low cost credit contract will be unsuitable for a consumer under paragraph 131(2)(b) if the contract is entered, or the credit limit of the contract is increased, in the period covered by the assessment mentioned in subsection 131(1) .

Note:

This section does not affect whether a low cost credit contract will be unsuitable for a consumer under paragraph 131(2)(a) or (c) .

Entering a low cost credit contract

133BXE(2)
For the purpose of applying subsection 131(1) in relation to a licensee entering a low cost credit contract (the initial contract) with a consumer, if the credit limit of the initial contract, at the time the initial contract is entered, will be less than or equal to the threshold amount, then it is presumed (unless the contrary is proved) that the initial contract will not be unsuitable for the consumer under paragraph 131(2)(b) if the initial contract is entered in the period covered by the assessment.

133BXE(3)
However, subsection (2) does not apply if:

(a) the licensee satisfies paragraph 128(c) in relation to entering the initial contract by making an assessment that would satisfy that paragraph in relation to entering a larger contract with the consumer (see subsection 133BXD(2) ); and

(b) the credit limit of the larger contract is greater than the threshold amount.

Increasing the credit limit of a low cost credit contract

133BXE(4)
For the purpose of applying subsection 131(1) in relation to an increase (the relevant increase ) made by a licensee to the credit limit of a low cost credit contract (the initial contract ) with a consumer, if the credit limit of the initial contract after the increase will be less than or equal to the threshold amount, then it is presumed (unless the contrary is proved) that the initial contract will not be unsuitable for the consumer under paragraph 131(2)(b) if the relevant increase occurs during the period covered by the assessment.

133BXE(5)
However, subsection (4) does not apply if:

(a) the licensee previously satisfied paragraph 128(c) in relation to entering the initial contract by making an assessment that would have satisfied that paragraph in relation to entering a larger contract with the consumer (see subsection 133BXD(2) ); and

(b) the credit limit of the larger contract was greater than the threshold amount; and

(c) because of subsection 133BXD(4) , the licensee is not required to make a new assessment in order to satisfy paragraph 128(c) into relation to the relevant increase.

Definitions

133BXE(6)
In this section:

larger contract
means a low cost credit contract that:

(a) has a credit limit that is greater than the credit limit of the initial contract when the initial contract is entered; and

(b) has terms that are otherwise substantially the same as the terms of the initial contract when the initial contract is entered.

threshold amount
means:

(a) $ 2,000, unless paragraph (b) applies; or

(b) if the regulations prescribe another dollar amount (whether larger or smaller) for the purposes of this paragraph - that other dollar amount.

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