National Consumer Credit Protection Amendment (Credit Reform Phase 2) Bill 2012 (March 2013)

The CCLC has recently had the opportunity to make submissions in relation to Phase 2 of the National Consumer Credit legislative changes. As a whole the CCLC is extremely supportive of the Phase 2 Reforms. We were particularly supportive of the anti-avoidance and private lending reforms as these are areas where systemic avoidance of applicable credit legislation has been rife, causing considerable harm to vulnerable consumers.   We submitted that there were discrete changes to certain legislative language that  were still needed before this bill could be passed into law.

Primary Concerns

1.  Anti-Avoidance provisions should be enacted as a priority, even if that means separating the other proposed sections and passing anti-avoidance legislation separately.
2. We strongly support the drafting of the proposed Section 323A, although we made some minor recommendations for changes.
3. We support the current amendments to Section 171 which remove the short term and indefinite lease exemptions currently in  Section 171 of the National Credit Act.
4. We recommended changes to the current drafting of Section 171A(3) which classify ‘Rent to Own’ arrangements as indefinite leases and not as credit contracts.
5. We support the extension of the National Credit Act to regulate private lending.
6. We support the extension of the National Credit Act to investment lending but we are concerned that the provisions do not go far enough in relation to protecting borrowers with Regulated product (home-secured) investment credit contracts.