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 133BXC WHEN INQUIRIES ETC. ARE REASONABLE

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133BXC(1)
This section applies to a licensee who:

(a) enters a low cost credit contract with a consumer who will be the debtor under the contract; or

(b) increases the credit limit of a low cost credit contract with a consumer who is the debtor under the contract.

Note:

The licensee must also have elected under subsection 133BXA(1) that this Part apply to the licensee in relation to the low cost credit contract: see subsection 133BXA(2) .

Relevant matters

133BXC(2)
In determining whether the licensee has:

(a) made reasonable inquiries about the consumer ' s requirements and objectives in relation to the low cost credit contract, as required under paragraph 130(1)(a) ; and

(b) made reasonable inquiries about the consumer ' s financial situation, as required under paragraph 130(1)(b) ; and

(c) taken reasonable steps to verify the consumer ' s financial situation, as required under paragraph 130(1)(c) ;

regard must be had to the matters covered by subsection (3) of this section, and regard may be had to any other relevant matters.

Note:

Regulations made for the purposes of subsection 130(2) may prescribe particular inquiries or steps that must be made or taken, or that do not need to be made or taken, for the purposes of paragraph 130(1)(a) , (b) or (c) .

133BXC(3)
The matters covered by this subsection are the following:

(a) the nature of the low cost credit contract (including the terms of the contract and the type and amount of credit provided under the contract);

(b) if there is a target market determination (within the meaning of the Corporations Act 2001 ) for the low cost credit contract - the nature of the target market for the low cost credit contract, as described in that determination;

(c) whether the consumer is financially vulnerable;

(d) whether the licensee has any procedures in place to reduce the risk of the licensee providing credit to a consumer on terms that are not affordable for the consumer;

(e) whether the licensee has any procedures in place to mitigate the harm that may be caused to a consumer if the licensee provides credit to the consumer on terms that are not affordable for the consumer;

(f) any matters prescribed by the regulations.

Note:

The particular things that a licensee must do in order to satisfy the licensee ' s obligations under paragraphs 130(1)(a) to (c) in relation to low cost credit contracts may vary from case to case, and may be less onerous in some cases than in others, depending on matters such as those covered by this subsection.

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