The national credit reform package marks phase one of the reform of credit in Australia and includes:
- a licensing regime for all providers of consumer credit and services
- responsible lending conduct requirements
- sanctions and enforcement powers for the Australian Securities and Investments Commission (ASIC) as the regulator of the regime
ASIC is now the regulator of consumer credit and finance broking under the National Consumer Credit Protection Act 2009 (National Credit Act).
Schedule 1 of the National Credit Act contains the National Credit Code (Code). This largely replicates the state and territory based Uniform Consumer Credit Code (UCCC), including the aim to ensure strong consumer protection through ‘truth in lending’. The Code also regulates many aspects of the provision of certain types of credit.
Who is affected
If you engage in consumer credit activities, you will be affected by the national credit regime.
Products that are regulated include home loans, personal loans, credit cards, consumer leases, overdrafts and line of credit accounts, among other products and services.
Importantly the National Credit Code includes the provision of credit to purchase, renovate, improve or refinance a residential investment property.
Understanding the national credit regime
This section has been developed to help you understand the regulation of consumer credit and finance broking. It is also intended to provide you with guidance when licensing* will be required under the National Consumer Credit Protection Act 2009 and what must be done if want to engage in credit activities.
*Throughout these pages, reference to licensing means an Australian credit licence (credit licence) issued by the ASIC or becoming a credit representative of a licence holder.
Regulation of small business credit
The National Credit Act does include the regulation of credit to small business. The Government at the time had proposed the extension of the regime to include the provision of credit to small business, however it was not proceeded with.