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 133BXD ASSESSMENTS ETC. IN RELATION TO LARGER CONTRACTS

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133BXD(1)
This section applies to a licensee who enters a low cost credit contract (the initial contract ) with a consumer who will be the debtor under the contract.

Entering the initial contract

133BXD(2)
The licensee may satisfy paragraphs 128(c) and (d) in relation to entering the initial contract by (respectively):

(a) making an assessment that would satisfy paragraph 128(c) in relation to entering a larger contract with the consumer; and

(b) making inquiries and verification that would satisfy paragraph 128(d) in relation to entering the larger contract with the consumer.

Note:

For larger contract , see subsection (7) .

Subsequent credit increases

133BXD(3)
Subsection (4) applies if:

(a) the licensee satisfies paragraphs 128(c) and (d) in relation to entering the initial contract by:

(i) making an assessment (the initial assessment ) that would satisfy paragraph 128(c) in relation to entering, with the consumer, a larger contract with a particular credit limit (the maximum credit limit ); and

(ii) making inquiries and verification (the initial inquiries and verification ) that would satisfy paragraph 128(d) in relation to entering the larger contract with the consumer; and

(b) the initial assessment is an assessment that the larger contract will not be unsuitable for the consumer if the larger contract is entered in the period covered by the initial assessment.

133BXD(4)
If the licensee subsequently, within the protected period, makes a protected increase to the credit limit of the initial contract, then:

(a) the licensee is taken to satisfy section 128 in relation to the protected increase (regardless of whether the initial assessment, and the initial inquiries and verification, were made within the period that applies in relation to the protected increase under that section); and

(b) the initial assessment is taken to be:

(i) an assessment that covers the protected period; and

(ii) an assessment that the initial contract will not be unsuitable for the consumer if the protected increase is made in the protected period.

Note 1:

For protected increase and protected period , see subsection (7) .

Note 2:

Even if the licensee is taken under this subsection to satisfy section 128 in relation to the protected increase, it is still possible for the licensee to contravene subsection 131(1) or 133(1) in relation to the protected increase.

Exceptions

133BXD(5)
Subsection (4) does not apply to the licensee in relation to the protected increase if, at the time when the protected increase is made, the licensee has information on the basis of which it would be reasonable to conclude that the credit contract is likely to be unsuitable for the consumer if the protected increase is made.

133BXD(6)
Despite subsections (3) and (4) :

(a) the licensee may, at any time after making the initial assessment and before making the protected increase, make a new assessment in relation to the protected increase for the purposes of paragraph 128(c) ; and

(b) if the licensee does so, then subsection (4) of this section does not apply to the licensee in relation to the protected increase.

Definitions

133BXD(7)
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.

protected increase
: an increase to the credit limit of the initial contract is a protected increase if:

(a) after the increase, the initial contract has a credit limit that is no greater than the maximum credit limit (within the meaning of subparagraph (3)(a)(i) ); and

(b) the terms of the initial contract after the increase are otherwise substantially the same as the terms of the initial contract immediately before the increase.

protected period
means whichever of the following is shorter (disregarding paragraph (4)(b) ):

(a) the period covered by the initial assessment;

(b) the period of 2 years beginning when the period covered by the initial assessment begins.

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