On Friday 14 August 2009 the Commonwealth Government released the National Consumer Credit Protection (NCCP) Regulations and announced changes to the timetable for implementation.
The consultation drafts which were released:
- replace the existing UCCC regulations and make new regulations in relation to the licensing regime (National Consumer Credit Protection Regulations 2009)
- make transitional provisions (National Consumer Credit Protection (Transitional and Consequential Provisions) Regulations 2009)
- make special provisions for electronic credit transactions (Electronic Transactions Amendment Regulations 2009)
- set fees for the credit and broking licensing regime (National Consumer Credit Protection (Fees) Regulations 2009).
The changes will bring forward the responsible lending conduct requirements for brokers and some lenders, which will now apply from 1 January 2010 instead of 1 January 2011, as previously proposed.
This is very big news for the mortgage industry.
In summary, it is proposed that the responsible lending provision requirement not to arrange or provide credit that is unsuitable will come into force on 1 January 2010 for all lenders and brokers who are not authorised deposit-taking institutions (ADIs) or registered finance companies (RFCs). ADIs and RFCs will need to comply with this requirement from 1 January 2011.
All other responsible lending obligations such as disclosure requirements surrounding fees will come into force on 1 January 2011.
The current UCCC requirements will be replicated in the NCCP from 1 January 2010 but the new UCCC requirements introduced by the NCCP will now not come into force until 1 July 2010 providing time for the industry to prepare.
The new UCCC requirements include:
- application of the UCCC to loans made to individuals for investment in real estate
- introduction of a default notice for direct debit defaults and amendments to the current default notice requirements
- amendments to the business purpose declarations
- introduction of new notices in response to hardship variations and postponements.
With respect to fees, the table below summarises some of the key fees which will be charged by ASIC.
| Item | Electronic lodgement | Non electronic lodgements |
| Apply for a licence; varies depending on the
number of representatives. 10% discount for ADIs and WA A and B
class brokers and WA licensed credit providers: 1 2-5 6-10 11-20 21-30 31-50 51-100 More than 100 |
$450 $1,050 $2,700 $4,600 $7,500 $10,250 $15,900 $21,000 |
$565 $1.315 $2,375 $5,750 $9,375 $12,815 $19,875 $26,250 |
| Annual compliance certificate Same as application fee, but no discount for ADIs or WA licensees |
||
| Change of authorization of a credit representative | Nil | $25 |
| Search of register | $10 | |
| Inspection of document | $25 | |
| Late lodgement 1 month More than one month |
$65 $270 |
$65 $270 |
The legislation as released on Friday can be found here, along with the media release and consultation package information.
Submissions are due by Wednesday 9 September 2009. Gadens Lawyers will be working with the Mortgage and Finance Association of Australia to make a submission.
| Sydney | ||
| Jon Denovan | t (02) 9931 4927 | e jdenovan@nsw.gadens.com.au |
| Elise Ivory | t (02) 9931 4810 | e eivory@nsw.gadens.com.au |
| Melbourne | ||
| Peter Grotjan | t (03) 9617 8538 | e pgrotjan@vic.gadens.com.au |
| Danny Moore | t (03) 9617 8596 | e dmoore@vic.gadens.com.au |
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.