Credit Contracts Legislation Amendment Bill receives Royal assent
Yesterday, the Credit Contracts Legislation Amendment Bill received Royal assent. The first of these provisions takes effect today, 20 December 2019. Consultation on the draft Credit Contracts and Consumer Finance Amendment Regulations 2020 is also open until 5 February 2020.
Also, the Regulatory Systems (Economic Development) Amendment Act 2019 will make some minor amendments to the Credit Contracts and Consumer Finance Act 2003. These changes will come into force on 13 January 2020. Importantly, the changes disapply some rules to credit contracts which are not consumer credit contracts which will be welcomed.
A link to the Regulatory Systems (Economic Development) Amendment Act 2019 is available here.
Who needs to read it? Why?
These changes will affect banks and financial institutions who enter into any consumer credit contract.
What does it cover?
The new enforcement and penalty regime comes into force today. This means that all creditors should ensure, more than ever, that they comply under the current regime as the increases in penalties are significant.
Lenders should review documentation and processes in light of this change as the enforcement approach has evolved considerably since 2015. We recommend annual reviews given that even small errors can result in systemic problems with a book of loans.
The Bill’s main provisions and the commencement dates are shown in the table below.
|20 December 2019|
|1 June 2020|
|1 September 2020|
|1 April 2021|
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