Commonwealth legislation

ASIC Credit (Unsuitability—Credit Cards) Instrument 2018/753

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Commonwealth

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legislative instrument

Plain English Summary

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This instrument fixes a three‑year period for determining whether a credit card contract is “unsuitable” under the National Consumer Credit Protection Act (see section 5). It affects credit providers and consumers by defining how far back ASIC’s unsuitability tests apply when issuing, continuing or increasing a credit limit. The rule applies to contracts entered before and after 1 January 2019 (see section 6), shifting compliance and recordkeeping obligations onto credit providers when assessing suitability.

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ASIC Credit (Unsuitability—Credit Cards) Instrument 2018/753

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Commonwealth Coat of Arms and ASIC logo

ASIC Credit (Unsuitability—Credit Cards) Instrument 2018/753

I, Grant Moodie, delegate of the Australian Securities and Investments Commission, make the following legislative instrument.

Date 28 August 2018

Grant Moodie

Contents

Part 1—Preliminary

1 Name of legislative instrument

5 Period for determining unsuitability in respect of credit card contracts

Part 3—Transitional

6 Application

Part 1—Preliminary

1 Name of legislative instrument

This is the ASIC Credit (Unsuitability—Credit Cards) Instrument 2018/753.

2 Commencement

This instrument commences on the later of:

(a) 1 January 2019; and

(b) the day after it is registered on the Federal Register of Legislation.

Note: The register may be accessed at www.legislation.gov.au.

3 Authority

This instrument is made under subsection 160F(1) of the National Consumer Credit Protection Act 2009.

4 Definitions

In this instrument:

Act means the National Consumer Credit Protection Act 2009.

Part 2—Determination

5 Period for determining unsuitability in respect of credit card contracts

A period of three years is determined for the purposes of the following provisions of the Act:

(a) paragraph 118(3AA)(b);

(b) paragraph 119(3A)(b);

(d) paragraph 124(3A)(b);

(e) paragraph 131(3AA)(b);

(f) paragraph 133(3AA)(b).

Part 3—Transitional

6 Application

The determination in section 5 applies:

(a) so far as the provision to which it relates applies in relation to entering a credit card contract—to credit card contracts entered into on or after 1 January 2019; and

(b) so far as the provision to which it relates applies in relation to remaining in a credit card contract, or increasing the credit limit of a credit card contract:

(i) to credit card contracts entered into on or after 1 January 2019; and

(ii) to credit card contracts entered into before 1 January 2019.