National Consumer Credit Protection (National Credit Code) Regulations 2009

The National Consumer Credit Protection Act 2009 (the Act) applies to the provision of certain kinds of credit, to certain credit contracts, and to related matters.

Section M500 of the Act provides that the Governor‑General may make regulations prescribing matters required or permitted by that Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to that Act.

Schedule 1 to the Act sets out the National Credit Code (the Code).  The Code applies to the provision of credit (and to a credit contract and related matters) if, when a credit contract is entered into or is proposed to be entered into:

• the debtor is a natural person or a strata corporation; and
• the credit is provided or intended to be provided wholly or predominantly:
• for personal, domestic or household purposes; or
• to purchase, renovate or improve residential property for investment purposes; and
• a charge is or may be made for providing the credit; and
• the credit provider provides the credit in the course of a business of providing credit in this jurisdiction or as part of or incidental to any other business of the credit provider carried on in this jurisdiction.  The Code previously formed part of a legislative scheme that was based on the Uniform Credit Laws Agreement 1993 (the Agreement) of the States and Territories.  Under this Agreement, the States and Territories agreed to adopt uniform consumer credit laws throughout Australia.  The Agreement provided for the establishment of the uniform laws by what is termed “template” legislation.  Thus, the uniform consumer credit laws were established principally by one state, Queensland, in its Consumer Credit (Queensland) Act 1994, with the Code set out in an appendix to this legislation.

The other States and Territories (including Western Australia from 9 May 2003) enacted application of laws legislation applying, as the law of the relevant State or Territory, the Code.  Initially, Western Australia chose to enact its own substantially similar legislation, which was allowed under the Agreement.  The Code and the Consumer Credit Regulations (the Regulations) commenced operation on 1 November 1996 in all States and Territories other than Tasmania.  In Tasmania, the general commencement date was 1 March 1997.

As a result of the template scheme, any amendments to the Code or Regulations only needed to be made to the template legislation and they then automatically applied in other States without amendment to those States’ Enabling Acts.  Slightly different arrangements existed in Tasmania and Western Australia although the outcomes were the same.

The Code explains a number of concepts relating to the provision of credit, such as:

• the meaning of credit and amount of credit; and
• the meaning of credit contract; and
• the matters to which the Code applies or does not apply; and
• a person’s rights and obligations under a credit contract; and
• related mortgages and guarantees; and
• ending and enforcing a credit contract, mortgage or guarantee; and
• civil penalties for defaults of credit providers; and
• related sake contracts; and
• related insurance contracts; and
• advertising and related conduct; and
• comparison rates; and
• consumer leases.

The Code identifies a number of matters that are to be provided for in regulations. Details of the Regulations appear in the Attachment.

The Act does not specify any conditions that need to be satisfied before the power to make the proposed Regulations may be exercised.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Regulations will commence on TBA.