Division 3Unsuitability assessment policies

Chapter 1—Preliminary #### 1 Name of Regulations These Regulations are the National Consumer Credit Protection Regulations 2010. #### 3 Definitions (1) In these Regulations: > Act means the National Consumer Credit Protection Act 2009. > AFCA (short for the Australian Financial Complaints Authority) has the same meaning as in the Corporations Act. > agreed price, of goods hired under a consumer lease: see subregulation 105AA(2). > annual percentage rate has the same meaning as in section 27 of the Code. > Australian ADI has the meaning given by section 9 of the Corporations Act. > authorised contact means contact with a consumer by a person in relation to the supply of goods or services by the person to the consumer, if the contact is made: (a) no later than 3 months after the consumer provided his or her contact details: (i) to the person; and (ii) for the purpose of being contacted about the supply of the goods or services; or (b) by posting to, or leaving at, a residential address written promotional material about goods or services; or (c) in relation to the possible return of goods supplied to the consumer or the possible provision of replacement goods to the consumer. > campaign‑based benefit: see regulation 28VF. > carried over instrument has the meaning given by subsection 4(1) of the Transitional Act. > clawback requirements: see regulation 28VG. > Code means the National Credit Code. > Corporations Act means the Corporations Act 2001. > credit card means: (a) a card of a kind commonly known as a credit card; or (b) a card of a kind that persons carrying on business commonly issue to their customers, or prospective customers, for use in obtaining goods or services from those persons on credit; or (c) anything else that may be used as a card mentioned in paragraph (a) or (b). > credit card contract means a continuing credit contract (as defined in section 204 of the Code) under which credit is ordinarily obtained only by the use of a credit card. > credit reporting assistance: see regulation 4C. > debt management assistance: see regulation 4B. > debt management service: see subregulation 4A(2). > default rate has the same meaning as in section 27 of the Code. > drawdown cap: see subregulation 28VC(1) for the benefits to which the drawdown cap applies. > electronic document retrieval system: see regulation 72C. > excluded amount: see subregulation 28VD(3). > exempt public authority means a body corporate that is incorporated within Australia or an external Territory and is: (a) a public authority; or (b) an instrumentality or agency of the Crown in right of the Commonwealth, in right of a State or in right of a Territory. > exempt special purpose funding entity means a special purpose funding entity that is engaging in a credit activity and is exempt, under regulation 23B or 23C, from the requirement to hold a licence. > financial counselling association has the same meaning as in regulation 7.6.01 of the Corporations Regulations 2001. > financial counselling service means a counselling and advocacy service provided predominantly for the purpose of assisting individuals who are in financial difficulty to resolve their problems. > foreign company means either of the following: (a) a body corporate that is incorporated in an external Territory, or outside Australia and the external Territories, and is not: (i) a corporation sole; or (ii) an exempt public authority; (b) an unincorporated body that: (i) is formed in an external Territory or outside Australia and the external Territories; and (ii) under the law of its place of formation, may sue or be sued, or may hold property in the name of its secretary or of an officer of the body duly appointed for that purpose; and (iii) does not have its head office or principal place of business in Australia. > fund raising special purpose entity has the meaning given by subsection 5(1) of the Act as modified by item 3.2 of Schedule 3. > home renovation or improvement facility: see subregulation 28VC(4). > inappropriate person means: (a) a person in relation to whom: (i) a prescribed State or Territory order is in force; or (ii) a banning or disqualification order under Division 8 of Part 7.6 of the Corporations Act 2001 is in force; or (b) a person who is banned from engaging in a credit activity under: (i) a law of a State or Territory; or (ii) Part 2‑4 of the Act; or (c) a person who has been convicted of a serious fraud during the last 10 years; or (d) a person who is disqualified from managing a corporation under Part 2D.6 of the Corporations Act 2001; or (e) a person: (i) who is registered to engage in credit activities under Schedule 2 of the Transitional Act; and (ii) whose registration is suspended under a provision of item 23 of Schedule 2 to the Transitional Act, other than under paragraph 23(1)(a) or (b); or (f) a person: (i) who has been registered to engage in credit activities under Schedule 2 of the Transitional Act; and (ii) whose registration has been cancelled under a provision of item 23 of Schedule 2 to the Transitional Act, other than paragraph 23(1)(a) or (b); or (g) a person: (i) who is the holder of an Australian credit licence; and (ii) whose licence is suspended on a ground mentioned in subsection 54(1) of the Act, other than a ground mentioned in paragraph 54(1)(a) or (b); or (h) a person: (i) who has been the holder of an Australian credit licence; and (ii) whose licence has been cancelled on a ground mentioned in subsection 54(1) of the Act, other than a ground mentioned in paragraph 54(1)(a) or (b). (i) a person: (i) who is the holder of an Australian financial services licence; and (ii) whose licence is suspended on a ground mentioned in section 915B of the Corporations Act 2001, other than a ground mentioned in any of the following paragraphs: (A) paragraph 915B(1)(a) or (e); (B) paragraph 915B(2)(a) or (d); (C) paragraph 915B(3)(a) or (d); (D) paragraph 915B(4)(a) or (d); or (j) a person: (i) who has been the holder of an Australian financial services licence; and (ii) whose licence has been cancelled on a ground mentioned in section 915B of the Corporations Act 2001, other than a ground mentioned in any of the following paragraphs: (A) paragraph 915B(1)(a) or (e); (B) paragraph 915B(2)(a) or (d); (C) paragraph 915B(3)(a) or (d); (D) paragraph 915B(4)(a) or (d). > lawyer, for the purpose of regulation 24 has the meaning given by the modified definition of lawyer set out in subregulation 24(10). > line of credit facility: see subregulation 28VC(3). > linked credit provider, for the purpose of regulation 23A, has the meaning given by the modified definition of linked credit provider set out in regulation 25C. > linked credit provider or lessor, for the purpose of regulation 23, has the meaning given by the modified definition of linked credit provider set out in regulation 25B. > managed contract—see regulation 26. > maximum drawdown net of offset: see subregulations 28VD(1) and (2). > mortgage manager—see regulation 26. > non‑standard business premises means business premises that are not physically separate from premises regularly used by consumers for purposes other than being contacted in relation to the supply of goods or services. > officer of a body corporate has the meaning given by the definition of officer of a corporation (as it relates to a body corporate) in section 9 of the Corporations Act. > offset account, held by a consumer who is a debtor under a credit contract, has the meaning given by subregulation 28VD(4). > precontractual document means any of the following: (a) a precontractual statement mentioned in paragraph 16(1)(a) of the Code; (b) a document forming part of a precontractual statement; (c) a notice varying a precontractual statement; (d) an information statement mentioned in paragraphs 16(1)(b) or 16(1A)(b) of the Code. > product designer—see regulation 26. > public officer, of a body corporate, means a person appointed under section 252 of the Income Tax Assessment Act 1936 as it relates to a body corporate. > registered debt agreement administrator means a person registered by the Insolvency and Trustee Service Australia as a debt agreement administrator under Part IX of the Bankruptcy Act 1966. > registered person has the same meaning as in the Transitional Act. > restructuring practitioner has the same meaning as in the Corporations Act. > rural financial counselling service means a counselling and advocacy service provided mainly for the purpose of assisting primary producers, or rural or regional small businesses, who are in financial difficulty. > rural financial counselling service provider means a body that is funded wholly or partly by the Commonwealth, a State or a Territory to provide a rural financial counselling service. > securitisation entity has the meaning given by subsection 5(1) of the Act as modified by item 3.4 of Schedule 3. > services, for the purposes of regulations 23 and 23A, has the meaning given by the modified definition of services set out in regulation 25D. > servicing agreement has the meaning given by subsection 5(1) of the Act as modified by item 3.4 of Schedule 3. > special purpose funding entity has the meaning given by subsection 5(1) of the Act as modified by item 3.4 of Schedule 3. > substantial holding has the meaning given by the definition of that term (as it relates to a body corporate) in section 9 of the Corporations Act. > trail commission—see regulation 26. > unlicensed carried over instrument lender has the meaning given by modified subsection 5(1) of the Act as set out in item 2.4 of Schedule 2. > unsolicited contact includes contact with a consumer by a person or an associate of the person in relation to the supply of goods and services by the person to the consumer: (a) in the following circumstances: (i) the contact is the first contact made by the person; (ii) the contact is made in person from a non‑standard business premises; or (b) in the following circumstances: (i) the contact is made by the person or an associate of the person; (ii) the contact is not the first contact made by the person or an associate of the person; (iii) the first contact was made in person from a non‑standard business premises; or (c) in the following circumstances: (i) the consumer provided the consumer’s contact details to the person for the sole purpose of being contacted by the person in relation to the supply of goods or services by the person to the consumer; (ii) the contact is not the first contact made by the person; (iii) the contact is made on or after the day 3 months after the consumer provided the contact details; (iv) the contact is not authorised contact; or (d) in the following circumstances: (i) the consumer did not provide the consumer’s contact details to the person for the sole purpose of being contacted by the person in relation to the supply of goods or services by the person to the consumer; (ii) the contact is not described in paragraph (a) or (b); (iii) the contact is not authorised contact. > volume‑based benefit: see regulation 28VE. > volume bonus arrangement—see regulation 26. > year to which the drawdown cap applies in relation to a credit contract: see subregulation 28VC(2). (2) In these Regulations, a person is associated with a lessor if: (a) the person and the lessor are related bodies corporate for the purposes of the Corporations Act; or (b) the person is an officer, agent or employee of the lessor, or of any such related body corporate, acting in that capacity; or (c) the person is a supplier in respect of whom the lessor is a linked lessor. (3) In these Regulations, a provision of the Act modified in accordance with Division 2 of Part 2‑4 and Schedule 2 is referred to as modified. #### 4 Meaning of associate (1A) This regulation is made for the purposes of subsection 15A(2) of the Act. (1) This regulation has effect for the purposes of interpreting a reference (the associate reference), in relation to a person (the primary person), to an associate. (2) A person is not an associate of the primary person except as provided in this regulation. (3) Nothing in this regulation limits the generality of anything else in it. (4) If the primary person is a body corporate, the associate reference includes a reference to: (a) a director or secretary of the body; and (b) a related body corporate; and (c) a director or secretary of a related body corporate. (5) An associate reference includes a reference to: (a) a person in partnership with whom the primary person engages in a credit activity; and (b) subject to subregulation (8), a person who is a partner of the primary person otherwise than because of the engaging in a credit activity in partnership with the primary person; and (c) a trustee of a trust in relation to which the primary person benefits, or is capable of benefiting; and (d) a director of a body corporate of which the primary person is also a director and that engages in a credit activity; and (e) subject to subregulation (8), a director of a body corporate of which the primary person is also a director and that does not engage in a credit activity; and (f) a person in concert with whom the primary person is acting, or proposes to act, in respect of the matter to which the associate reference relates; and (g) a person with whom the primary person is, or proposes to become, associated, whether formally or informally, in any other way, in respect of the matter to which the associate reference relates. (6) If the primary person has entered, or proposes to enter, into a transaction, or has done, or proposes to do, any act or thing, in order to become associated with another person as mentioned in an applicable provision of this regulation, the associate reference includes a reference to that other person. (7) A person is not an associate of another person by virtue of subregulation (5), or by virtue of subregulation (6) as it applies in relation to subregulation (5), merely because one or both of the following occurs: (a) one gives advice to the other, or acts on the other’s behalf, in the proper performance of the functions attaching to a professional capacity or a business relationship; (b) one, as a client, gives specific instructions to the other, whose ordinary business includes engaging in credit activities, to enter into a credit contract on the client’s behalf in the ordinary course of that business. (8) For the purposes of proceedings in relation to a matter mentioned in these Regulations in which it is alleged that a person (person 1) was an associate of another person by virtue of paragraph (5)(b) or (e), person 1 is not taken to have been an associate of the other person in relation to a matter by virtue of that paragraph unless it is proved that person 1 knew, or ought to have known, at that time, the material particulars of that matter. (9) A reference to an associate, in relation to an entity (other than a body corporate) that: (a) engages in a credit activity; and (b) is constituted by 2 or more persons; includes a reference to an associate of any of those persons. #### 4A Debt management services Prescribed credit activity (1) For the purposes of item 6 of the table in subsection 6(1) of the Act, the provision of a debt management service is a prescribed activity. Meaning of debt management service (2) A person provides a debt management service if the person: (a) provides debt management assistance to a consumer; or (b) provides credit reporting assistance to a consumer. #### 4B Meaning of debt management assistance Providing assistance to debtors (1) A person provides debt management assistance to a consumer if, by dealing directly with the consumer or the consumer’s agent in the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person or another person, the person: (a) suggests that the consumer apply for: (i) a change to a credit contract for which the consumer is the debtor; or (ii) a deferral or waiver of an amount under a credit contract for which the consumer is the debtor; or (iii) a postponement relating to a credit contract for which the consumer is the debtor; or (b) assists the consumer to apply for: (i) a change to a credit contract for which the consumer is the debtor; or (ii) a deferral or waiver of an amount under a credit contract for which the consumer is the debtor; or (iii) a postponement relating to a credit contract for which the consumer is the debtor; or (c) suggests that the consumer: (i) make a complaint or claim to the credit provider, AFCA, ASIC or the Information Commissioner, in relation to a credit contract for which the consumer is (or was) the debtor; or (ii) give a hardship notice (within the meaning of the Code) to the credit provider under a credit contract for which the consumer is (or was) the debtor; or (iii) institute proceedings or take any other action in relation to a credit contract for which the consumer is (or was) the debtor; or (d) assists the consumer to: (i) make a complaint or claim to the credit provider, AFCA, ASIC or the Information Commissioner, in relation to a credit contract for which the consumer is (or was) the debtor; or (ii) give a hardship notice (within the meaning of the Code) to the credit provider under a credit contract for which the consumer is (or was) the debtor; or (iii) institute proceedings or take any other action in relation to a credit contract for which the consumer is (or was) the debtor. It does not matter whether the person does so on the person’s own behalf or on behalf of another person. Providing assistance to guarantors (2) A person provides debt management assistance to a consumer if, by dealing directly with the consumer or the consumer’s agent in the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person or another person, the person: (a) suggests that the consumer apply for: (i) a change to a guarantee for which the consumer is the guarantor; or (ii) a deferral or waiver of an amount under a guarantee for which the consumer is the guarantor; or (iii) a postponement relating to a guarantee for which the consumer is the guarantor; or (b) assists the consumer to apply for: (i) a change to a guarantee for which the consumer is the guarantor; or (ii) a deferral or waiver of an amount under a guarantee for which the consumer is the guarantor; or (iii) a postponement relating to a guarantee for which the consumer is the guarantor; or (c) suggests that the consumer: (i) make a complaint or claim to the credit provider, AFCA, ASIC or the Information Commissioner, in relation to a guarantee for which the consumer is (or was) the guarantor; or (ii) institute proceedings or take any other action in relation to a guarantee for which the consumer is (or was) the guarantor; or (d) assists the consumer to: (i) make a complaint or claim to the credit provider, AFCA, ASIC or the Information Commissioner, in relation to a guarantee for which the consumer is (or was) the guarantor; or (ii) institute proceedings or take any other action in relation to a guarantee for which the consumer is (or was) the guarantor. It does not matter whether the person does so on the person’s own behalf or on behalf of another person. Fee, charge or other amount must be paid or payable (3) However, a person does not provide debt management assistance unless a fee, charge or other amount is paid or payable by or on behalf of the consumer in relation to the assistance. (4) For the purposes of subregulation (3), it is immaterial if the fee, charge or other amount is paid or payable to the provider of the assistance or to any other person. #### 4C Meaning of credit reporting assistance Providing assistance to debtors (1) A person provides credit reporting assistance to a consumer if, by dealing directly with the consumer or the consumer’s agent in the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person or another person, the person: (a) suggests that the consumer apply for a change to information collected or held by a credit reporting body in relation to a credit contract for which the consumer is (or was) the debtor; or (b) assists the consumer to apply for a change to information collected or held by a credit reporting body in relation to a credit contract for which the consumer is (or was) the debtor; or (c) suggests that the consumer: (i) make a complaint or claim to the credit provider, the credit reporting body, AFCA, ASIC or the Information Commissioner, regarding information collected or held by a credit reporting body in relation to a credit contract for which the consumer is (or was) the debtor; or (ii) institute proceedings or take any other action regarding information collected or held by a credit reporting body in relation to a credit contract for which the consumer is (or was) the debtor; or (d) assists the consumer to: (i) make a complaint or claim to the credit provider, the credit reporting body, AFCA, ASIC or the Information Commissioner, regarding information collected or held by a credit reporting body in relation to a credit contract for which the consumer is (or was) the debtor; or (ii) institute proceedings or take any other action regarding information collected or held by a credit reporting body in relation to a credit contract for which the consumer is (or was) the debtor. It does not matter whether the person does so on the person’s own behalf or on behalf of another person. Providing assistance to guarantors (2) A person provides credit reporting assistance to a consumer if, by dealing directly with the consumer or the consumer’s agent in the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person or another person, the person: (a) suggests that the consumer apply for a change to information collected or held by a credit reporting body in relation to a guarantee for which the consumer is (or was) the guarantor; or (b) assists the consumer to apply for a change to information collected or held by a credit reporting body in relation to a guarantee for which the consumer is (or was) the guarantor; or (c) suggests that the consumer: (i) make a complaint or claim to the credit provider, the credit reporting body, AFCA, ASIC or the Information Commissioner, regarding information collected or held by a credit reporting body in relation to a guarantee for which the consumer is (or was) the guarantor; or (ii) institute proceedings or take any other action regarding information collected or held by a credit reporting body in relation to a guarantee for which the consumer is (or was) the guarantor; or (d) assists the consumer to: (i) make a complaint or claim to the credit provider, the credit reporting body, AFCA, ASIC or the Information Commissioner, regarding information collected or held by a credit reporting body in relation to a guarantee for which the consumer is (or was) the guarantor; or (ii) institute proceedings or take any other action regarding information collected or held by a credit reporting body in relation to a guarantee for which the consumer is (or was) the guarantor. It does not matter whether the person does so on the person’s own behalf or on behalf of another person. Fee, charge or other amount must be paid or payable (3) However, a person does not provide credit reporting assistance unless a fee, charge or other amount is paid or payable by or on behalf of the consumer in relation to the assistance. (4) For the purposes of subregulation (3), it is immaterial if the fee, charge or other amount is paid or payable to the provider of the assistance or to any other person. #### 4D Small amount credit contracts—credit limit increase to cover fees The credit limit set out in paragraph (c) of the definition of small amount credit contract in subsection 5(1) of the Act is increased by the amount of each of the following as included in the amount of credit to be provided under the contract: (a) the permitted establishment fee for the contract; (b) the first permitted monthly fee payable under the contract. > Note 1: Section 31A of the Code deals with the fees and charges that can be imposed under a small amount credit contract. > Note 2: While this regulation could raise a credit limit to a maximum of $2,480, no more than $2,000 would be available to the consumer under the contract. #### 5 Prescribed orders For the definition of prescribed State or Territory order in subsection 5(1) of the Act, orders made under an Act specified in the following table are prescribed. ```html <table cellspacing="0" cellpadding="0" style="width:98.74%; border-collapse:collapse"><tbody><tr><td style="width:10.56%; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Item</span></p></td><td style="width:89.44%; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Act</span></p></td></tr><tr><td colspan="2" style="border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">New South Wales</span></p></td></tr><tr><td style="width:10.56%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span>1.1</span></p></td><td style="width:89.44%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-style:italic">Crimes (Criminal Organisations Control) Act 2009</span></p></td></tr><tr><td colspan="2" style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Queensland</span></p></td></tr><tr><td style="width:10.56%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span>3.1</span></p></td><td style="width:89.44%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-style:italic">Criminal Organisation Act 2009</span></p></td></tr><tr><td colspan="2" style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">South Australia</span></p></td></tr><tr><td style="width:10.56%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>5.1</span></p></td><td style="width:89.44%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span style="font-style:italic">Serious and Organised Crime (Control) Act 2008</span></p></td></tr></tbody></table> ``` #### 6 Forms (1) A reference in these Regulations to a form of a particular number is a reference to the form of that number in Schedule 1. (2) The number of a form need not appear on a document that is required to comply with the form. (3) A reference to a provision of the Code, or of these Regulations, to which a form relates need not appear on a document that is required to comply with the form. (4) The expression ‘credit provider’, ‘debtor’, ‘lessor’ or ‘lessee’ in a form may be replaced by the name of: (a) the credit provider, debtor, lessor or lessee; or (b) another expression that is explained in the form. (5) A document that is required to comply with a form need not contain any matter that is not relevant to the credit contract, mortgage, guarantee or consumer lease concerned. The consequential renumbering of items is permissible. > Note: Section 208 of the Code makes provision with respect to forms. The section provides, among other things, that strict compliance with a form is not necessary and substantial compliance is sufficient. Chapter 2—Licensing of persons who engage in credit activities ## Part 2‑1—Australian credit licences #### 7 How to get an Australian credit licence—requirements for a foreign entity to appoint local agent (1) For paragraph 37(1)(e) of the Act, a foreign entity that: (a) is not a registered foreign company; and (b) applies for an Australian credit licence; must meet the requirements in subregulations (2) and (3). (2) The foreign entity must: (a) have appointed, as an agent, a person who is: (i) an individual or a company; and (ii) a resident in this jurisdiction; and (iii) authorised to accept, on the foreign entity’s behalf, service of process and notices; and (b) lodge, with the application, a memorandum of appointment or a power of attorney that is duly executed by or on behalf of the foreign entity and states the name and address of the agent. (3) If the memorandum of appointment, or power of attorney, lodged under paragraph (2)(b) was executed on behalf of the foreign entity, the foreign entity must also lodge a copy declared in writing to be a true copy of the document authorising the execution. (4) In this regulation: > registered foreign company has the meaning given by section 9 of the Corporations Act 2001. #### 7A When licence may be granted—continuous credit activity For paragraph 37(1)(e) of the Act, a requirement in relation to a person who: (a) is a credit provider, lessor, mortgagee or beneficiary of a guarantee in relation to a carried over instrument immediately before 1 July 2010; and (b) intends to engage in a credit activity in relation to the carried over instrument on or after 1 July 2010; and (c) intends to engage in a credit activity otherwise than in relation to the carried over instrument on or after 1 July 2010; is that the person must apply under section 36 of the Act for a licence to engage in the credit activities mentioned in paragraphs (b) and (c). #### 8 How to get an Australian credit licence—streamlined process for particular classes of applicants (1) For section 39 of the Act, if an applicant is: (a) in the class of applicants mentioned in subregulation (2); and (b) is applying for a licence to engage in credit activities of the kind in which the person is authorised to engage under a law of a State or Territory; paragraph 37(1)(b) of the Act applies in relation to the applicant only to the extent that ASIC must consider whether it has reason to believe that the applicant is likely to contravene the obligations that will apply under paragraphs 47(1)(i) and (j) of the Act if the licence is granted. (2) The class of applicants is persons: (a) who have applied for an Australian credit licence; and (b) who are authorised to engage in credit activities under a law of a State or Territory; and (c) who, under the law of the State or Territory, or under a condition imposed on the person by a licensing authority under the law of the State or Territory: (i) are required to comply with the following requirements: (A) the person must comply with the law; (B) the person must have sufficient or adequate resources to ensure the person can comply with the law; (C) the person must be responsible for ensuring that all representatives of the person comply with the law; (D) the person must arrange or provide credit that is appropriate for consumers; (E) the person must act honestly and fairly in the person’s dealings with borrowers and lenders; (F) the person must ensure that the person and all representatives of the person are competent to engage in the credit activities the person is authorised to engage in; (G) if the person is acting as an agent on behalf of a consumer, the person must act in the best interests of the person’s principal; and (ii) are not required to be supervised by another person; and (d) who may be banned from engaging in credit activities under the law of the State or Territory; and (e) who have provided to ASIC a written statement in the approved form that the person will comply with the person’s obligations under the Act. (3) For section 39 of the Act, paragraph 37(1)(c) of the Act does not apply in relation to the class of applicants mentioned in subregulation (4) to the extent that the applicant is applying for a licence to engage in credit activities of the kind the person was authorised to engage in under a law of a State or Territory. (4) The class of applicants is persons who: (a) are in the class of applicants mentioned in subregulation (2); and (b) are authorised to engage in credit activities under a law of a State or Territory that: (i) requires the person to demonstrate that the person is a fit and proper person (however described); or (ii) deems the person to be ineligible to engage in credit activities if the person is not a fit and proper person (however described). (5) For section 39 of the Act, if an applicant is in the class of applicants mentioned in subregulation (7) or (8): (a) section 37 of the Act does not apply in relation to the applicant; and (b) if: (i) the applicant applies under section 36 of the Act for a licence; and (ii) the application includes a statement, in accordance with the requirements of the approved form, to the effect that the applicant will, if granted the licence, comply with the applicant’s obligations as a licensee; ASIC must grant the applicant a licence. (6) If ASIC grants the applicant a licence under subregulation (5), the licence must authorise the licensee to engage in credit activities that equate, as closely as possible, to the credit activities in relation to which the application was made. (7) The class of applicants is persons who: (a) are authorised as a general insurer by APRA under section 12 of the Insurance Act 1973; and (b) are included on the Register of General Insurers and Authorised NOHCs; and (c) offer lenders mortgage insurance products; and (d) engage in credit activities only: (i) as an assignee in relation to providing the mortgage insurance products; or (ii) as the credit provider under the doctrine of subrogation in relation to providing the mortgage insurance products. (8) The class of applicants is persons who: (a) are registered by APRA under section 21 of the Life Insurance Act 1995; and (b) engage in credit activities in relation to the provision of credit only because of the operation of the terms and conditions of: (i) a life policy (within the same meaning as in that Act) that was entered into before 1 July 2010 by the person; or (ii) a document issued or given by the person in relation to a life policy (within the same meaning as in that Act) that was entered into before 1 July 2010 by the person. #### 9 The conditions on the licence (1) For section 45 of the Act, an Australian credit licence is subject to the conditions set out in this regulation. (2) If: (a) there is a change in a matter particulars of which are entered in the credit register for licensees; and (b) the change is not a direct consequence of an act by ASIC; the licensee must lodge particulars of the change with ASIC, in the approved form, within 10 business days after the change occurs. (3) If: (a) there is a change in a matter particulars of which are entered in the credit register for credit representatives; and (b) the change is not required to be reported in accordance with section 71 of the Act; and (c) the change is not a direct consequence of an act by ASIC; the licensee must ensure that particulars of the change are lodged with ASIC in the approved form within 15 business days after the change occurs. (4) The licensee must ensure that each credit representative of the licensee that may give an authorisation to an individual is aware of the requirements in section 71 of the Act. (5) The licensee must ensure that, before the licensee authorises an individual to engage in a credit activity on its behalf as mentioned in section 64 of the Act, reasonable inquiries are made to establish: (a) the individual’s identity; and (b) whether the individual has already been allocated a number by ASIC as a credit representative. (6) The licensee must ensure that, before a body corporate that is a credit representative of the licensee authorises an individual to engage in a credit activity on behalf of the licensee as mentioned in section 65 of the Act, reasonable inquiries are made to establish: (a) the individual’s identity; and (b) whether the individual has already been allocated a number by ASIC as a credit representative. (7) The licensee must ensure that, if: (a) ASIC has allocated a number to a credit representative; and (b) the licensee, or a body corporate that has authorised an individual to engage in a credit activity on behalf of the licensee as mentioned in section 65 of the Act, lodges a document with ASIC that refers to the credit representative; the document refers to the number. (8) The licensee must provide evidence of an authorisation of any of its credit representatives: (a) on request by any person; and (b) free of charge; and (c) as soon as practicable after receiving the request and, in any event, within 10 business days after the day on which it received the request. (9) The licensee must take reasonable steps to ensure that each of its credit representatives supplies evidence of its authorisation by the licensee: (a) on request by any person; and (b) free of charge; and (c) as soon as practicable after receiving the request and, in any event, within 10 business days after the day on which the credit representative received the request. (10) If the licensee becomes aware of any change in control of the licensee, the licensee must lodge with ASIC particulars of the change, in the approved form, not later than 10 business days after the change. (11) For subregulation (10): (a) a change in control, in relation to a licensee, includes a transaction, or a series of transactions in a period of 12 months, that results in a person having control of the licensee, either alone or together with associates of the person; and (b) control, in relation to a licensee, means: (i) if the licensee is a body corporate: (A) the capacity to cast, or control the casting of, more than one half of the maximum number of votes that might be cast at a general meeting of the licensee; or (B) directly or indirectly holding more than one half of the issued share capital of the licensee (not including any part of the issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or (ii) the capacity to control the composition of the licensee’s board or governing body; or (iii) the capacity to determine the outcome of decisions about the licensee’s financial and operating policies. (12) For subparagraph (11)(b)(iii), the following matters must be taken into account in determining whether a person has the capacity to determine the outcome of decisions about the licensee’s financial and operating policies: (a) the practical influence the person can exert (rather than the rights it can enforce); (b) any practice or pattern of behaviour affecting the licensee’s financial or operating policies (whether or not it involves a breach of an agreement or a breach of trust). (13) On the request of any person, the licensee must make available, within 10 business days, evidence of its Australian credit licence for inspection by that person. (14) If: (a) the licensee is not a body regulated by APRA; and (b) an event occurs that may make a material adverse change to the financial position of the licensee by comparison with its financial position: (i) at the time of the application for the Australian credit licence; or (ii) as described in documents lodged with ASIC after the application for the Australian credit licence; the licensee must lodge with ASIC in the approved form a notice setting out particulars of the event as soon as practicable, and in any case not later than 3 business days, after the licensee becomes aware of the event. #### 9AA The conditions on the licence—special purpose funding entity (1) For subsection 45(7) of the Act, the licence is subject to the conditions set out in this regulation if the licensee is a party to a servicing agreement with a special purpose funding entity. (2) The licensee must lodge with ASIC a notice, in an approved form, stating that the licensee is a party to a servicing agreement with a special purpose funding entity. (3) For subregulation (2): (a) if the servicing agreement was entered into before 1 July 2010, the licensee must notify ASIC no later than 30 business days after 1 July 2010; and (b) if the servicing agreement was entered into on or after 1 July 2010, the licensee must lodge with ASIC a notice, in an approved form and stating that the service agreement was entered into, no later than 20 business days after the servicing agreement was entered into. (4) If the licensee ceases to be a party to a servicing agreement with a special purpose funding entity, the licensee: (a) must lodge with ASIC a notice, in an approved form, stating that the licensee has ceased to be a party to the servicing agreement with the entity; and (b) must lodge the notice no later than 15 business days after the licensee ceases to be a party. (5) The licensee: (a) must lodge with ASIC a notice, in an approved form, setting out any action by a natural person in a position to control or influence the special purpose funding entity that has or may have the effect of directing the licensee to act inconsistently with: (i) the licensee’s licence conditions; or (ii) the credit legislation; and (b) must lodge the notice no later than 15 business days after the action occurs. #### 9AB Conditions for licensee—referrals (1) For subsection 45(7) of the Act, a licensee who engages in a credit activity, on or after 1 October 2010, as a consequence of being a licensee described in subregulation 25(5) is subject to the conditions set out in this regulation. > Note: The licensee, or a representative of the licensee, provides the credit activity to a person by contacting the person after a referral by the referrer described in subregulation 25(5). Register of referrers (2) The licensee must keep, or have access to, a register of the referrers described in subregulation 25(5): (a) with which the licensee has an agreement of the kind described in paragraph 25(5)(a); or (b) who have been made a written offer of the kind described in sub‑subparagraph 25(5)(b)(ii)(B). (3) The register must include: (a) the referrer’s name and contact details; and (b) the date and means by which the referrer was advised in writing of the way in which the referrer may engage in credit activities under the agreement; and (c) the day on which the referrer first engaged in the conduct described in subparagraph 25(5)(c)(ii) under the agreement. > Note: The conduct is giving to the licensee, registered person or representative the consumer’s name. (4) The licensee must make the register available to ASIC on request. Contact after referral (5) The licensee may only contact the consumer described in subregulation 25(5) if he or she does so within 10 business days after receiving the referral from the referrer described in that subregulation. (6) If the licensee contacts the consumer in person, the licensee must begin the discussion with the consumer (after the licensee has identified itself) by statements to the following effect: (a) ‘I am contacting you because we have been provided with your contact details by \[name of referrer\]. Can you confirm that you agreed with \[name of referrer\] to have us contact you?’; (b) if a payment of indirect remuneration or a financial benefit may be given to the referrer—‘before we continue, I would like to let you know that if you take up any of our products or services, \[name of referrer\] may receive the following financial benefits \[brief description\]’; (c) ‘are you happy to continue this discussion?’. (7) If the licensee contacts the consumer by letter or email, the licensee must include statements to the following effect at the start of the letter or email: (a) the licensee is contacting the consumer as a result of being provided with their contact details by the referrer (identifying the referrer by name); (b) the referrer may receive a financial benefit or payment. #### 9A Conditions for unlicensed carried over instrument lender—credit register (1) For modified section 45 of the Act, an unlicensed carried over instrument lender is subject to the conditions set out in this regulation. (2) If: (a) there is a change in a matter, particulars of which are entered in the credit register for unlicensed carried over instrument lenders; and (b) the change is not a direct consequence of an act by ASIC; the lender must lodge particulars of the change with ASIC, in the approved form, no later than 10 business days after the change occurs. (3) If the lender becomes aware of any change in control of the lender, the lender must lodge with ASIC particulars of the change, in the approved form, not later than 10 business days after the change. (4) For subregulation (3): (a) a change in control, in relation to a lender, includes a transaction, or a series of transactions in a period of 12 months, that results in a person having control of the lender, either alone or together with associates of the person; and (b) control, in relation to a lender, means: (i) if the lender is a body corporate: (A) the capacity to cast, or control the casting of, more than one half of the maximum number of votes that might be cast at a general meeting of the lender; or (B) directly or indirectly holding more than one half of the issued share capital of the lender (not including any part of the issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or (ii) the capacity to control the composition of the lender’s board or governing body; or (iii) the capacity to determine the outcome of decisions about the lender’s financial and operating policies. (5) For subparagraph (4)(b)(iii), the following matters must be taken into account in determining whether a person has the capacity to determine the outcome of decisions about the lender’s financial and operating policies: (a) the practical influence the person can exert (rather than the rights it can enforce); (b) any practice or pattern of behaviour affecting the lender’s financial or operating policies (whether or not it involves a breach of an agreement or a breach of trust). (6) If: (a) the lender is not a body regulated by APRA; and (b) an event occurs that may make a material adverse change to the financial position of the lender by comparison with its financial position: (i) at the time it became an unlicensed carried over instrument lender; or (ii) as described in documents lodged with ASIC after it became an unlicensed carried over instrument lender; the lender must lodge with ASIC in the approved form a notice setting out particulars of the event as soon as practicable, and in any case not later than 3 business days, after the lender becomes aware of the event. #### 10 Obligations of licensees—alternative dispute resolution systems (1) For subparagraph 47(1)(h)(i) of the Act, ASIC must take the following matters into account when considering whether to make or approve standards or requirements relating to internal dispute resolution: (a) Australian/New Zealand Standard AS/NZS 10002:2014 Guidelines for complaint management in organizations published jointly by, or on behalf of, Standards Australia and Standards New Zealand, as in force or existing on 29 October 2014; (b) any other matter ASIC considers relevant. (2) ASIC may: (a) vary or revoke a standard or requirement that it has made in relation to an internal dispute resolution procedure; and (b) vary or revoke the operation of a standard or requirement that it has approved in its application to an internal dispute resolution procedure. (5) For the purposes of paragraph 110(1)(a) of the Act, a licensee who engages in credit activities in the capacity of any of the following: (a) a trustee appointed under the will or on the intestacy of a person; (b) a trustee appointed under an express trust if: (i) the settlor is an individual; and (ii) the interest in the trust is not a credit contract; (c) an attorney appointed under an enduring power of attorney; is exempt from the requirements in paragraph 47(1)(i) of the Act in relation to the credit activities if complaints about the credit provided by the licensee may be made to the Ombudsman of a State or Territory. #### 11 Obligations of licensees—foreign entity must continue to have local agent (1) For paragraph 47(1)(m) of the Act, a foreign entity that: (a) is not a foreign company; and (b) is a licensee; must meet the requirements in subregulation (2). (2) The foreign entity must: (a) at all times, have an agent who is: (i) an individual or a company; and (ii) resident in this jurisdiction; and (iii) authorised to accept, on the foreign entity’s behalf, service of process and notices; and (b) notify ASIC of any change to: (i) the agent; or (ii) the name or address of the agent; not later than 1 month after the change; and (c) make arrangements that ensure that ASIC may treat a document as being served on the foreign entity by leaving it at, or by sending it by post to: (i) an address of the agent that has been notified to ASIC; or (ii) if a notice or notices of a change or alteration to that address has or have been given to ASIC—the address shown in the most recent notice. #### 11A Obligations of licensees—cooperation with AFCA (1) For the purposes of paragraph 47(1)(m) of the Act, a licensee must comply with the obligations in subregulation (2). (2) The licensee must take reasonable steps to cooperate with AFCA in resolving any complaint under the AFCA scheme to which the licensee is a party, including by: (a) giving reasonable assistance to AFCA in resolving the complaint; and (b) identifying, locating and providing to AFCA any documents and information that AFCA reasonably requires for the purposes of resolving the complaint; and (c) giving effect to any determination made by AFCA in relation to the complaint. (3) Subregulation (2) does not apply to superannuation complaints (within the meaning of the Corporations Act 2001). > Note: For provisions relating to superannuation complaints, see Division 3 of Part 7.10A of the Corporations Act 2001. #### 12 Obligations of licensees—requirements for compensation arrangements (1) For paragraph 48(2)(a) of the Act, and unless the licensee is an exempt licensee, the arrangements mentioned in subsection 48(1) of the Act are subject to the requirement that the licensee hold professional indemnity insurance cover that is adequate, having regard to: (a) the licensee’s membership of the AFCA scheme, taking account of the maximum liability that has, realistically, some potential to arise in connection with: (i) any particular claim against the licensee; and (ii) all claims in respect of which the licensee could be found to have liability; and (b) relevant considerations in relation to the engaging in a credit activity by the licensee, including: (i) the volume of business involved in the credit activity; and (ii) the number and kind of clients; and (iii) the kind, or kinds, of credit activities involved; and (iv) the number of representatives of the licensee. (2) For paragraph 48(3)(c) of the Act, a matter to which ASIC must have regard, before approving particular arrangements under paragraph 48(2)(b) of the Act, is whether those arrangements would provide coverage that is adequate, having regard to matters of the kind mentioned in subregulation (1). (3) In this regulation: > exempt licensee means any of the following: (a) a company or institution of any of the following kinds: (i) a general insurance company authorised by APRA under section 12 of the Insurance Act 1973, and included on the Register of General Insurers and Authorised NOHCs; (ii) a life insurance company registered with APRA under section 21 of the Life Insurance Act 1995; (iii) an authorised deposit‑taking institution; (b) a licensee: (i) that is related (within the meaning of section 50 of the Corporations Act) to a company or institution mentioned in paragraph (a); and (ii) in respect of which the company or institution has provided a guarantee that: (A) ensures payment of the obligations of the licensee to an extent that is adequate within the meaning of subregulation (1); and (B) is approved in writing by ASIC; (c) a licensee whose license: (i) is subject to a condition under subsection 45(6) of the Act that the licensee is only authorised to engage in credit activities mentioned in item 1, 3, 4 or 5 in the table in subsection 6(1) of the Act; and (ii) is not subject to a condition that the licensee hold professional indemnity insurance; (d) a licensee who: (i) has a licence to provide a credit service within the meaning given by section 7 of the Act; and (ii) will only provide the credit service in relation to: (A) credit contracts for which the licensee is the credit provider; or (B) consumer leases for which the licensee is the lessor. > Note: For paragraph (b), a decision to refuse to approve a guarantee is a reviewable decision under section 327 of the Act. #### 12A Obligations of licensees—breaches of certain civil penalty provisions not required to be reported to ASIC For the purposes of paragraph 50A(4)(b) of the Act: (a) the following civil penalty provisions of the Act are prescribed: (i) subsection 52(2); (ii) subsection 53(1); (iii) subsection 53(4); (iv) subsection 71(1); (v) subsection 71(2); (vi) subsection 71(4); (vii) subsection 88(1); (viii) subsection 113(1); (ix) subsection 120(1); (x) subsection 124B(1); (xi) subsection 126(1); (xii) subsection 127(1); (xiii) subsection 132(2); (xiv) subsection 133AC(2); (xv) subsection 133AD(2); (xvi) subsection 133AE(2); (xvii) subsection 133BC(1); (xviii) subsection 133BD(1); (xix) subsection 133BFA(2); (xx) subsection 133BJ(1); (xxi) subsection 133BU(2); (xxii) subsection 133CR(1); (xxiii) subsection 133CR(3); (xxiv) subsection 133CU(1); (xxv) subsection 133DC(2); (xxvi) subsection 133DD(2); (xxvii) subsection 133DE(1); (xxviii) subsection 133DE(2); (xxix) subsection 136(1); (xxx) subsection 143(1); (xxxi) subsection 149(1); (xxxii) subsection 150(1); (xxxiii) subsection 155(2); (xxxiv) subsection 158(1); (xxxv) subsection 160(1); (xxxvi) subsection 160(2); (xxxvii) subsection 160B(1); (xxxviii) subsection 160C(1); (xxxix) section 238D; and (b) subsection 174(3) of the Code is prescribed; and (c) all civil penalty provisions of Commonwealth legislation that is covered by paragraph (d) of the definition of credit legislation in subsection 5(1) of the Act are prescribed. #### 12B Obligations of licensees—breaches of certain key requirements not required to be reported to ASIC For the purposes of paragraph 50A(4)(c) of the Act, the key requirements (within the meaning of the Code) contained in the following provisions of the Code are prescribed: (a) subsection 17(3); (b) subsection 17(4); (c) subsection 17(5); (d) subsection 17(6); (e) paragraphs 17(8)(a) and (b); (f) subsection 17(9); (g) subsection 17(11); (h) paragraphs 17(15)(a) and (b); (i) subsection 17(15A); (j) subsection 34(6); (k) section 35. #### 13 Obligations of licensees—offence in relation to failure to cite licence number in documents (1) For subsection 52(2) of the Act, the following kinds of documents are prescribed: (a) a document that is required to be created or produced in accordance with Chapter 3 of the Act; (b) a printed advertisement that relates to the provision of credit to which the Code would apply; (c) a document that is required to be created, produced, given or published by a provision of the Code; (d) a document lodged with ASIC that relates to the provision of credit to which the Code would apply. > Note: Under subsection 52(3) of the Act, a person commits an offence if: (a) the person is subject to a requirement to include and identify its Australian credit licence number in a document prescribed by the regulations; and (b) the person engages in conduct; and (c) the conduct contravenes the requirement. (2) For the purposes of paragraph (1)(b), if a printed advertisement identifies more than 1 licensee, or uses a word or description that covers more than 1 licensee, subsection 52(2) of the Act is modified to provide that only 1 of the licensees must comply with paragraphs 52(2)(a) and (b) of the Act. > Note: Paragraph 110(1)(c) of the Act provides that the regulations may provide that Chapter 2 of the Act applies as if specified provisions were omitted, modified or varied as specified in the regulations. #### 14 Obligations of licensees—who compliance certificate must be signed by For paragraph 53(3)(b) of the Act, the following persons are prescribed: (a) if the body corporate is not an ADI: (i) the Chief Executive Officer of the body corporate; or (ii) if the body corporate does not have a Chief Executive Officer—the person who: (A) is responsible for managing the affairs of the body corporate; and (B) has authority to make decisions in relation to the allocation of resources so that the body corporate complies with the Act; (b) if the body corporate is an ADI: (i) the Chief Executive Officer of the body corporate; or (ii) a person who satisfies the criteria to be fit and proper to hold a responsible person position under Prudential Standard APS 520. > Note: Prudential Standard APS 520 is in Schedule 1 to the Banking (prudential standard) determination No. 1 of 2006—Prudential Standard APS 520 Fit and Proper. #### 15 When a licence can be suspended, cancelled or varied—grounds to suspend or cancel licence For paragraph 55(2)(e) of the Act, the following are matters that ASIC must have regard to: (a) a licensee failing to lodge an annual compliance certificate under section 53 of the Act; (b) a licensee lodging an annual compliance certificate that contains information that: (i) is false or misleading; or (ii) can not reasonably be believed to be true by the person signing the certificate under subsection 53(3) of the Act. ## Part 2‑2—Authorisation of credit representatives #### 16 Sub‑authorisation by body corporate For the purposes of paragraph 110(1)(c) of the Act, paragraph 65(6)(c) of the Act is modified to include after ‘the AFCA scheme’ the words ‘and is not an employee or director of the body corporate’. > Note: Paragraph 110(1)(c) of the Act provides that the regulations may provide that Chapter 2 of the Act applies as if specified provisions were omitted, modified or varied as specified in the regulations. ## Part 2‑3—Financial records, trust accounts and audit reports #### 17 Information and matters to be contained in a trust account audit report For paragraph 100(3)(b) of the Act, the trust account audit report must include a statement about the following matters: (a) whether, in the opinion of the auditor, the licensee’s trust accounts have been kept regularly and properly maintained; (b) whether the auditor received all necessary records, information and explanations from the licensee; (c) whether, in the opinion of the auditor, the licensee’s trust accounts provide a true and fair view of the transactions recorded and the balance at the end of the relevant period; (d) any other matter in relation to the trust accounts which should, in the opinion of the auditor, be communicated to ASIC. #### 18 Eligibility of auditors to prepare trust account audit report (1) For subsection 100(4) of the Act, a person is ineligible to prepare a trust account audit report for a credit service licensee if: (a) the person does not meet the requirements of regulation 19; or (b) the person is not an authorised audit company (within the meaning given by section 9 of the Corporations Act); or (c) the person owes an amount to, or is owed an amount by: (i) the credit service licensee; or (ii) if the credit service licensee is a body corporate—a related body corporate of the credit service licensee; or (d) a body corporate in which the person has a substantial holding owes an amount to, or is owed an amount by: (i) the credit service licensee; or (ii) if the credit service licensee is a body corporate—a related body corporate of the credit service licensee; or (e) if the credit service licensee is a body corporate—the person is: (i) an officer of the body corporate; or (ii) a partner or employee of an officer of the body corporate. (2) For paragraph (1)(c), a debt owed by an individual to a body corporate is to be disregarded if: (a) the body corporate is: (i) an Australian ADI; or (ii) a body corporate registered under the Life Insurance Act 1995; and (b) the debt arose because of a loan that the body corporate made to the individual in the ordinary course of the body corporate’s ordinary business; and (c) the individual used the amount of the loan to pay the whole or part of the purchase price of premises that the individual uses as his or her principal place of residence. (3) For subparagraphs (1)(e)(i) and (ii), a person is taken to be an officer of a body corporate if: (a) the person is an officer of a related body corporate; or (b) unless ASIC directs that this paragraph does not apply in relation to the person—the person has, at any time within the immediately preceding period of 12 months, been an officer or promoter of the body corporate or of a related body corporate. (4) For this regulation, a person is not taken to be an officer of a body corporate by reason only: (a) of being or having been the liquidator of the body corporate or of a related body corporate; or (b) of having been appointed as an auditor of the body corporate or of a related body corporate; or (c) of being a public officer of the body corporate for any purpose relating to taxation; or (d) of being or having been authorised to accept service of process or any notices on behalf of the body corporate or a related body corporate. #### 19 Auditors who prepare audit reports (1) For paragraph 106(c) of the Act, this regulation: (a) sets out who is eligible to be an auditor for the purpose of preparing the audit reports mentioned in paragraph 102(1)(b) of the Act; and (b) sets out when a person may be appointed as an auditor. > Note: Paragraph 106(c) of the Act provides that the regulations may make provision in relation to the auditors that prepare the audit reports mentioned in paragraphs 106(a) and (b) of the Act. Eligibility to be an auditor (2) A person is eligible to be appointed as an auditor for the purpose mentioned in paragraph (1)(a) only if: (a) the person is a registered company auditor or an authorised audit company (within the meaning given by section 9 of the Corporations Act); and (b) the person: (i) is not an employee, director or partner: (A) of the licensee; or (B) of any other person carrying on a business of engaging in credit activities; and (ii) is not carrying on a business of engaging in credit activities. Appointment as an auditor (3) A licensee must: (a) within 3 months of being required to open a trust account, appoint a person who meets the requirements of subregulation (2) to be the licensee’s auditor; and (b) lodge with ASIC a notice, in the approved form, of the appointment within 14 days after appointing the person. (4) If a person is appointed as a licensee’s auditor, the appointment is continuous until the first of the following events occurs: (a) the licensee is no longer required to keep a trust account; (b) the auditor dies or otherwise ceases to engage in the business of being an auditor; (c) the auditor is unable to perform his or her duties as the licensee’s auditor; (d) ASIC approves the auditor’s resignation; (e) ASIC approves a request by the licensee to replace the person as an auditor. (5) If a person ceases to be a licensee’s auditor under paragraph (4)(b), (c), (d) or (e), the licensee must: (a) within 28 days of the cessation of the appointment, appoint another person who meets the requirements of subregulation (2) to be the licensee’s auditor; and (b) lodge with ASIC a notice, in the approved form, of the appointment within 14 days after appointing the person. ## Part 2‑4—Exemptions and modifications ### Division 1—Exemptions #### Subdivision 1.1—Persons exempt from being licensed #### 20 Persons exempt from requiring a licence—general (1) For the purposes of paragraph 110(1)(a) of the Act, this regulation exempts certain persons engaging in a credit activity from: (a) section 29 of the Act; and (b) definitions in the Act, as they apply to references in the provisions mentioned in paragraph (a); and (c) instruments made for the purposes of any of the provisions mentioned in paragraphs (a) and (b). > Note: Section 29 of the Act provides that a person must not engage in a credit activity if the person does not hold a licence authorising the person to engage in the credit activity. (2) The person is exempted only to the extent that the person is engaging in the specified credit activity. > Note: If the person also engages in a credit activity that is not the subject of an exemption under the Act, the person is not exempted in relation to that credit activity. (3) A person is exempted if: (a) the person engages in a credit activity while: (i) performing functions, or exercising powers, as a trustee within the meaning of the Bankruptcy Act 1966; or (ii) performing functions, or exercising powers, incidental to the person’s appointment as a trustee; or (b) the person engages in a credit activity while: (i) performing functions, or exercising powers, as a controller within the meaning of the Corporations Act 2001, provisional liquidator, or liquidator (whether appointed by a court or otherwise); or (ii) performing functions, or exercising powers, incidental to the person’s appointment as a controller, provisional liquidator or liquidator; or (c) the person engages in a credit activity while performing functions, or exercising powers, as a person appointed by a court to engage in a credit activity; or (d) the person engages in a credit activity while performing functions, or exercising powers, as the Public Trustee acting under a law of a State or Territory; or (e) the person engages in a credit activity while: (i) performing functions, or exercising powers, as an administrator within the meaning of the Corporations Act 2001; or (ii) performing functions, or exercising powers, incidental to the person’s appointment as an administrator; or (ea) the person engages in a credit activity while: (i) performing functions, or exercising powers, as a restructuring practitioner for a company or a company’s restructuring plan; or (ii) performing functions, or exercising powers, incidental to the person’s appointment as a restructuring practitioner for a company or a company’s restructuring plan; or (f) the person engages in a credit activity while: (i) performing functions, or exercising powers, as a controlling trustee within the meaning of section 187 of the Bankruptcy Act 1966; or (ii) performing functions, or exercising powers, incidental to the person’s appointment as a controlling trustee; or (fa) the person engages in a credit activity while: (i) performing functions, or exercising powers, as a trustee of a personal insolvency agreement under Part X of the Bankruptcy Act 1966; or (ii) performing functions, or exercising powers, incidental to the person’s appointment as a trustee of a personal insolvency agreement; or (g) the person engages in a credit activity while: (i) performing functions, or exercising powers, as a trustee or person administering a compromise or arrangement between a body corporate and another person or person; or (ii) performing functions, or exercising powers, incidental to the person’s appointment as a trustee or person of that kind; or (h) the person engages in a credit activity while performing functions, or exercising powers, as a personal representative of a deceased person other than a deceased licensee; or (i) subject to subregulation (4), the person engages in a credit activity while performing functions, or exercising powers, as a personal representative of a deceased licensee; or (j) the person engages in a credit activity while performing functions, or exercising powers, as a registered debt agreement administrator preparing and administering a debt agreement under Part IX of the Bankruptcy Act 1966; or (k) the person engages in a credit activity while: (i) performing functions, or exercising powers, as a registered trustee under Part X of the Bankruptcy Act 1966 in the ordinary course of activities as a registered trustee that is reasonably regarded as a necessary part of those activities; or (ii) performing functions, or exercising powers, incidental to the person’s appointment as a registered trustee; or (l) the person engages in a credit activity while: (i) performing functions, or exercising powers, as a registered liquidator within the meaning of the Corporations Act 2001 in the ordinary course of activities as a registered liquidator that is reasonably regarded as a necessary part of those activities; or (ii) performing functions, or exercising powers, incidental to the person’s appointment as a registered liquidator. (4) Paragraph (3)(i) only applies until the first of the following events occurs: (a) the end of 6 months after the death of the licensee; (b) the removal or discharge of the personal representative; (c) the final distribution of the licensee’s estate. (5) A person is exempted if: (a) the person (the financial counselling agency) engages in a credit activity as part of the provision of a financial counselling service to a client; and (b) no benefit (including any indirect remuneration) is payable to, or for the benefit of, the financial counselling agency, its representatives or its associates by any person in relation to any action by or on behalf of the client arising from the financial counselling service (including the engaging in of the credit activity); and (c) no fees or charges (however described) are payable by or on behalf of the client in relation to the financial counselling service other than any fees or charges payable on behalf of the client by the Commonwealth, a State or a Territory; and (d) the financial counselling agency: (i) does not engage in any other kind of credit activity; and (ii) takes all reasonable steps to ensure that none of its representatives engages in any other kind of credit activity; and (e) the financial counselling agency takes all reasonable steps to ensure that each person who engages in credit activities on its behalf: (i) is a member of, or is eligible to be a member of, a financial counselling association; and (ii) has undertaken appropriate training to ensure that they have adequate skills and knowledge to satisfactorily provide the financial counselling service (including engaging in the credit activity). (5A) A person is exempted if: (a) the person is a rural financial counselling service provider who provides credit assistance as part of the provision of a rural financial counselling service to a consumer; and (b) no benefit (including any indirect remuneration) is payable to, or for the benefit of, the rural counselling service provider, its representatives or its associates by any person in relation to any action by or on behalf of the consumer arising from the rural financial counselling service (including the credit assistance); and (c) no fees or charges (however described) are payable by or on behalf of the consumer in relation to the rural financial counselling service other than any fees or charges payable on behalf of the client by the Commonwealth, a State or a Territory; and (d) the rural financial counselling service provider: (i) does not provide any other kind of credit assistance; and (ii) takes all reasonable steps to ensure that none of its representatives provides any other kind of credit assistance; and (e) the rural financial counselling service provider takes all reasonable steps to ensure that each person who provides credit assistance on its behalf: (i) is a member of, or is eligible to be a member of, a financial counselling association; and (ii) has undertaken appropriate training to ensure that they have adequate skills and knowledge to satisfactorily provide the rural financial counselling service (including the credit assistance). (6) A person is exempted if: (a) the person: (i) is a related body corporate of a licensee; and (ii) is engaging in credit activities only on behalf of the licensee; and (iii) is engaging in credit activities only because its employees and directors are engaging in credit activities on behalf of the licensee; and (b) the credit activities in which the person engages are not those mentioned in: (i) paragraph (a) or (b) of item 1 of the table in subsection 6(1) of the Act; or (ii) paragraph (a) or (b) of item 3 of the table in subsection 6(1) of the Act. (7) A person is exempted if the person is a public body or authority, or a local government body or authority, constituted under an Act of the Commonwealth or a State or Territory. (8) Subject to subregulation (9), if a person is authorised to engage in particular credit activities by: (a) an Act of the Commonwealth or a State or Territory (other than the Act, the Transitional Act or an Act mentioned in subregulation (10)); or (b) a licence or registration issued or granted under an Act of the Commonwealth or a State or Territory (other than the Act, the Transitional Act or an Act mentioned in subregulation (10)); the person is exempted to the extent that the person is engaging in the credit activities in which the person is authorised to engage under that Act, licence or registration. (10) For paragraphs (8)(a) and (b), the Acts are: (a) the Finance Brokers Control Act 1975 (WA); and (b) the Credit (Administration) Act 1984 (WA); and (c) the Consumer Credit (Administration) Act 1996 (ACT). (11) A person is exempted if: (a) the person is an organisation that provides services and makes benefits available to members of: (i) the organisation; or (ii) a program or facility operated or conducted by or within the organisation; and (b) an incidental benefit of membership of the organisation, program or facility is that members are eligible: (i) to apply for a particular credit contract or consumer lease offered by a licensee, a registered person or an exempt special purpose funding entity; or (ii) to obtain services or benefits under a particular credit contract or consumer lease offered by a licensee, a registered person or an exempt special purpose funding entity; and (d) the organisation provides credit services (within the meaning given by section 7 of the Act) in relation to the particular credit contract or consumer lease to members or persons likely to become members under a contract or agreement with the licensee, registered person or exempt special purpose funding entity; and (e) it would not ordinarily be the case that: (i) the credit to be provided under the credit contract is provided predominantly for the payment for services, goods or benefits provided by the organisation or an associate of the organisation; or (ii) the goods to be hired under the consumer lease are supplied by the organisation or an associate of the organisation. (12) A person is exempted if: (a) either: (i) the person: (A) is a charitable body (within the same meaning as in ASIC Class Order \[CO 02/184\]); and (B) is engaging in credit activities by providing a credit service in relation to credit contracts or consumer leases provided by a licensed or registered credit provider or lessor or an exempt special purpose funding entity that is a credit provider or lessor; or (ii) the person: (A) is not a charitable body (within the same meaning as in ASIC Class Order \[CO 02/184\]); and (B) is engaging in credit activities by providing a credit service in relation to credit contracts or consumer leases provided by an ADI; and (b) the credit contracts or consumer leases are offered as part of a program designed for low income consumers who are entitled: (i) to hold a Health Care Card or Pension Concession Card; or (ii) to receive Family Tax Benefit Part A; and (c) the only benefit (including as indirect remuneration) payable to, or on behalf of, the person by any other person in relation to any action by, or on behalf of, the client arising from providing the credit service is payments made by a third party that has no existing relationship with the client. (13) A person is exempted if: (a) the person engages in credit activities mentioned in: (i) paragraph (c) of item 1 of the table in subsection 6(1) of the Act; or (ii) paragraph (c) of item 3 of the table in subsection 6(1) of the Act; or (iii) paragraph (b) of item 4 of the table in subsection 6(1) of the Act; or (iv) paragraph (b) of item 5 of the table in subsection 6(1) of the Act; and (b) the person engages in the credit activities while performing the statutory obligations of a credit provider, lessor, mortgagee or beneficiary of a guarantee under: (i) the Privacy Act 1988; or (ii) the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006. Sunset of subregulations (5) and (5A) (14) Subregulations (5) and (5A) are repealed on 1 January 2033. #### 21 Persons exempt from requiring a licence—debt collectors (1) For the purposes of paragraph 110(1)(a) of the Act, this regulation exempts certain persons engaging in a credit activity from: (a) section 29 of the Act; and (b) definitions in the Act, as they apply to references in the provisions mentioned in paragraph (a); and (c) instruments made for the purposes of any of the provisions mentioned in paragraphs (a) and (b). > Note: Section 29 of the Act provides that a person must not engage in a credit activity if the person does not hold a licence authorising the person to engage in the credit activity. (2) The person is exempted only to the extent that the person is engaging in the specified credit activity. > Note: If the person also engages in a credit activity that is not the subject of an exemption under the Act, the person is not exempted in relation to that credit activity. (3) A person is exempted if: (a) the person engages in a credit activity mentioned in: (i) paragraph (c) of item 1 of the table in subsection 6(1) of the Act, on behalf of the credit provider who is a licensee, registered person or exempt special purpose funding entity; or (ii) paragraph (c) of item 3 of the table in subsection 6(1) of the Act, on behalf of the lessor who is a licensee, registered person or exempt special purpose funding entity; or (iii) paragraph (b) of item 4 of the table in subsection 6(1) of the Act, on behalf of the mortgagee who is a licensee, registered person or exempt special purpose funding entity; or (iv) paragraph (b) of item 5 of the table in subsection 6(1) of the Act, on behalf of the other person who is a licensee, registered person or exempt special purpose funding entity; and (b) the person only performs the obligations, or exercises the rights, mentioned in those paragraphs in relation to: (i) demanding and receiving payments from: (A) borrowers or guarantors under credit contracts; or (B) lessees under consumer leases; and (ii) enforcing rights in relation to taking possession of: (A) property secured by a mortgage; or (B) goods hired under a consumer lease; and (c) either: (i) the person: (A) holds a licence or authorisation to engage in an activity mentioned in paragraph (a) under one or more of the Acts mentioned in subregulation (5); or (B) is authorised to act on behalf of a person who holds a licence or authorisation of a kind mentioned in sub‑subparagraph(A); or (ii) the person: (A) is not required to hold a licence or authorisation, or be authorised to act on behalf of a person who holds a licence or authorisation, to engage in an activity mentioned in paragraph (a) in a State or Territory; and (B) is not prohibited from engaging in an activity mentioned in paragraph (a) by an order of a court or a law of the State or Territory; and (d) the person is authorised in writing by the licensee, registered person or exempt special purpose funding entity to engage in the activity mentioned in paragraph (a). (5) For subparagraph (3)(c)(i), the Acts are the following: (a) the Fair Trading Act 1987 (NSW); (b) the Australian Consumer Law and Fair Trading Act 2012 (Vic.); (c) the Debt Collectors (Field Agents and Collection Agents) Act 2014 (Qld); (d) the Debt Collectors Licensing Act 1964 (WA); (e) the Security and Investigation Industry Act 1995 (SA); (f) the Security and Investigations Agents Act 2002 (Tas.); (g) the Commercial and Private Agents Licensing Act 1979 (NT). #### 22 Persons exempt from requiring a licence—third parties (1) For the purposes of paragraph 110(1)(a) of the Act, this regulation exempts certain persons engaging in a credit activity from: (a) section 29 of the Act; and (b) definitions in the Act, as they apply to references in the provisions mentioned in paragraph (a); and (c) instruments made for the purposes of any of the provisions mentioned in paragraphs (a) and (b). > Note: Section 29 of the Act provides that a person must not engage in a credit activity if the person does not hold a licence authorising the person to engage in the credit activity. > Note: Subsection 29(3) provides, among other things, that it is a defence if the person is a credit representative of a person who holds a licence. (2) The person is exempted only to the extent that the person is engaging in the specified credit activity. > Note: If the person also engages in a credit activity that is not the subject of an exemption under the Act, the person is not exempted in relation to that credit activity. (3) A person is exempted if: (a) the person engages in a credit activity by selling, storing or transporting property of a debtor, lessor, mortgagor or guarantor on behalf of: (i) a credit provider who is a licensee, registered person or exempt special purpose funding entity; or (ii) a mortgagee who is a licensee, registered person or exempt special purpose funding entity; or (iii) a person who is the beneficiary of a guarantee who is a licensee, registered person or exempt special purpose funding entity; or (iv) a lessor who is a licensee, registered person or exempt special purpose funding entity; or (b) the person engages in a credit activity by giving or sending to a debtor, lessee, mortgagor or guarantor, on behalf of: (i) a credit provider who is a licensee, registered person or exempt special purpose funding entity; or (ii) a mortgagee who is a licensee, registered person or exempt special purpose funding entity; or (iii) a person who is the beneficiary of a guarantee who is a licensee, registered person or exempt special purpose funding entity; or (iv) a lessor who is a licensee, registered person or exempt special purpose funding entity; a notice or document that the person mentioned in subregulation (i), (ii), (iii) or (iv) is obliged by law to give or send to the debtor, lessee, mortgagor or guarantor. #### 23 Persons exempt from requiring a licence—suppliers of goods or services (1) For the purposes of paragraph 110(1)(a) of the Act, this regulation exempts certain persons from: (a) section 29 of the Act; and (b) definitions in the Act as they apply to references in the provision mentioned in paragraph (a); and (c) instruments made for the purpose of any of the provisions mentioned in paragraphs (a) and (b). > Note: Section 29 of the Act provides that a person must not engage in a credit activity if the person does not hold a licence authorising the person to engage in the credit activity. (2) The person is exempted only to the extent that the person is engaging in the specified credit activity. > Note: If the person also engages in a credit activity that is not the subject of an exemption under the Act, the person is not exempted in relation to that credit activity. (3) A person is exempted if: (a) the person is: (i) a supplier of goods or services (the supplier); or (ii) a related body corporate of the supplier; or (iii) engaging in a credit activity primarily on the premises of the supplier with the agreement of the supplier; and (b) the person is: (i) on behalf of a relevant credit provider for a credit contract or proposed credit contract, performing the obligations or exercising the rights of the relevant credit provider in relation to the contract or proposed contract; or (ii) on behalf of a relevant lessor for a consumer lease or proposed consumer lease, performing the obligations or exercising the rights of the lessor under the lease or proposed lease; or (iii) on behalf of a relevant mortgagee for a mortgage or proposed mortgage, performing the obligations or exercising the rights of the mortgagee under the mortgage or proposed mortgage; or (iv) on behalf of a relevant beneficiary of a guarantee or proposed guarantee, performing the obligations or exercising the rights of the beneficiary in relation to the guarantee or proposed guarantee; or (v) providing credit services in relation to a credit contract or consumer lease offered or provided by a relevant credit provider or relevant lessor; and (c) if: (i) the person is acting on behalf of the credit provider for a credit contract or proposed credit contract that is a loan contract or engaging in credit services in relation to a loan contract; and (ii) the credit provided under the loan contract or the credit that would be provided if the loan contract were entered into will wholly or predominantly be used to pay for goods or services supplied by the supplier; and (d) if: (i) the person is acting on behalf of the credit provider of a credit contract or proposed credit contract that is a continuing credit contract or engaging in credit services in relation to a continuing contract; and (ii) the credit initially provided under the continuing credit contract or the credit that would be initially provided under the continuing credit contract if it were entered into will wholly or predominantly be used to pay for goods or services supplied by the supplier; and (e) if: (i) the person is acting on behalf of a lessor for a consumer lease or proposed consumer lease or engaging in credit services in relation to a consumer lease; and (ii) payments made under the lease or payments that would be made under the lease if the lease were entered into will wholly or predominantly be used to pay the lessor for the hire of goods supplied by the supplier. (4) The person is not exempted if the person supplies goods or services to the consumer as a result of unsolicited contact with the consumer. (5) In this regulation: > relevant beneficiary of a guarantee or proposed guarantee, means the beneficiary of the guarantee or proposed guarantee if the beneficiary is a: (a) licensee, registered person or exempt special purpose funding entity; and (b) linked credit provider or lessor of the supplier mentioned in subparagraph (3)(a)(i). > relevant credit provider for a credit contract or proposed credit contract, means the credit provider for the contract or proposed contract if the credit provider is a: (a) licensee, registered person or exempt special purpose funding entity; and (b) linked credit provider or lessor of the supplier mentioned in subparagraph (3)(a)(i). > relevant lessor for a consumer lease or proposed consumer lease, means the lessor under the lease or proposed lease if the lessor is a: (a) licensee, registered person or exempt special purpose funding entity; and (b) linked credit provider or lessor of the supplier mentioned in subparagraph (3)(a)(i). > relevant mortgagee for a mortgage or proposed mortgage, means the mortgagee under the mortgage or proposed mortgage if the mortgagee is a: (a) licensee, registered person or exempt special purpose funding entity; and (b) linked credit provider or lessor of the supplier mentioned in subparagraph (3)(a)(i). #### 23A Persons exempt from requiring a licence—suppliers of goods or services with branded or co‑branded credit card (1) For the purposes of paragraph 110(1)(a) of the Act, this regulation exempts certain persons engaging in a credit activity from: (a) section 29 of the Act; and (b) definitions in the Act as they apply to references in the provision mentioned in paragraph (a); and (c) instruments made for the purpose of any of the provisions mentioned in paragraphs (a) and (b). > Note: Section 29 of the Act provides that a person must not engage in a credit activity if the person does not hold a licence authorising the person to engage in the credit activity. (2) The person is exempted only to the extent that the person is engaging in the specified credit activity in relation to a continuing credit contract under which a credit card is provided. > Note: If the person also engages in a credit activity that is not the subject of an exemption under the Act or the Transitional Act, the person is not exempted in relation to that credit activity. (3) The person is exempted if: (a) the person is: (i) a supplier of goods or services; or (ii) a related body corporate of a supplier of goods or services; or (iii) engaging in a credit activity on behalf of the supplier of goods or services; and (b) the person meets the requirements of subregulation (4) or (5). (4) For paragraph (3)(b), the requirements are that the person is performing the obligations or exercising the rights of a credit provider in relation to a credit contract or proposed credit contract: (a) on behalf of the credit provider who is a linked credit provider of the supplier and is a licensee, registered person or exempt special purpose funding entity; and (b) in relation to a continuing credit contract under which a credit card is: (i) provided or would be provided if the contract were entered into; and (ii) branded or co‑branded with the name of the supplier or a related body corporate of the supplier or any other words, phrases, initials or logo associated with the supplier or related body corporate. (5) For paragraph (3)(b), the requirements are that the person is providing credit services in relation to a continuing credit card contract under which a credit card is provided or would be provided if the contract were entered into and the: (a) credit provider for the continuing credit contract is a linked credit provider of the supplier and is a licensee, registered person or exempt special purpose funding entity; and (b) credit card is branded or co‑branded with the name of the supplier or a related body corporate of the supplier or any other words, phrases, initials or logo associated with the supplier or related body corporate. (6) The person is exempted if the person engages in credit activities on the premises of the supplier. #### 23B Persons exempt from requiring a licence—fund raising special purpose entity (1) For the purposes of paragraph 110(1)(a) of the Act, this regulation applies in relation to a fund raising special purpose entity if: (a) it engages in a credit activity; and (b) it is party to a servicing agreement; and (c) it is a member of the AFCA scheme; and (d) if it is a body corporate—no director or secretary of the body corporate is an inappropriate person; and (e) if it is a trust—no trustee of the trust is an inappropriate person. (2) The fund raising special purpose entity is exempted from: (a) section 29 of the Act; and (b) definitions in the Act, as they apply to references in the provision mentioned in paragraph (a); and (c) instruments made for the purpose of any of the provisions mentioned in paragraphs (a) and (b). > Note: Section 29 of the Act provides that a person must not engage in a credit activity if the person does not hold a licence authorising the person to engage in the credit activity. (3) The fund raising special purpose entity is exempted only to the extent that it is engaging in the specified credit activity. > Note 1: If the fund raising special purpose entity also engages in a credit activity that is not the subject of an exemption under the Act or the Transitional Act, it is not exempted in relation to that credit activity. > Note 2: Under subsection 109(3) of the Act, ASIC may declare that instruments made under Chapter 2 of the Act apply in relation to a credit activity (other than an exempt credit activity in relation to a specified credit contract, mortgage, guarantee or consumer lease), or a class of persons or credit activities as if specified provisions were omitted, modified or varied as specified in the declaration. (4) This regulation ceases to apply in relation to the fund raising special purpose entity and does not again apply in relation to the entity (subject to subregulation (6)) if: (a) the entity is a party to a complaint under the AFCA scheme (other than a superannuation complaint within the meaning of the Corporations Act 2001); and (b) ASIC is satisfied that the entity has failed to comply with subregulation (5) in relation to the complaint; and (c) ASIC gives the entity written notice that it is so satisfied; and (d) 28 days have passed since the notice was given. > Note: For provisions relating to superannuation complaints, see Division 3 of Part 7.10A of the Corporations Act 2001. (5) For the purposes of paragraph (4)(b), the fund raising special purpose entity must take reasonable steps to cooperate with AFCA in resolving the complaint, including by: (a) giving reasonable assistance to AFCA in resolving the complaint; and (b) identifying, locating and providing to AFCA any documents and information that AFCA reasonably requires for the purposes of resolving the complaint; and (c) giving effect to any determination made by AFCA in relation to the complaint. (6) For the purposes of paragraph 327(1)(i) of the Act, an application may be made to the Administrative Review Tribunal for review of a decision of ASIC under subregulation (4). > Note: For notice requirements relating to reviewable decisions, see section 328 of the Act. #### 23C Persons exempt from requiring a licence—securitisation entity (1) For the purposes of paragraph 110(1)(a) of the Act, this regulation applies in relation to a securitisation entity if: (a) it engages in a credit activity; and (b) it is party to a servicing agreement; and (ca) it is a member of the AFCA scheme; and (d) if it is a body corporate—no director or secretary of the body corporate is an inappropriate person; and (e) if it is a trust—no trustee of the trust is an inappropriate person. (2) The securitisation entity is exempted from: (a) section 29 of the Act; and (b) definitions in the Act, as they apply to references in the provision mentioned in paragraph (a); and (c) instruments made for the purpose of any of the provisions mentioned in paragraphs (a) and (b). > Note: Section 29 of the Act provides that a person must not engage in a credit activity if the person does not hold a licence authorising the person to engage in the credit activity. (3) The securitisation entity is exempted only to the extent that it is engaging in the specified credit activity. > Note 1: If the securitisation entity also engages in a credit activity that is not the subject of an exemption under the Act or the Transitional Act, it is not exempted in relation to that credit activity. > Note 2: Under subsection 109(3) of the Act, ASIC may declare that instruments made under Chapter 2 of the Act apply in relation to a credit activity (other than an exempt credit activity in relation to a specified credit contract, mortgage, guarantee or consumer lease), or a class of persons or credit activities as if specified provisions were omitted, modified or varied as specified in the declaration. (4) This regulation ceases to apply in relation to the securitisation entity and does not again apply in relation to the entity (subject to subregulation (6)) if: (a) the entity is a party to a complaint under the AFCA scheme (other than a superannuation complaint within the meaning of the Corporations Act 2001); and (b) ASIC is satisfied that the entity has failed to comply with subregulation (5) in relation to the complaint; and (c) ASIC gives the entity written notice that it is so satisfied; and (d) 28 days have passed since the notice was given. > Note: For provisions relating to superannuation complaints, see Division 3 of Part 7.10A of the Corporations Act 2001. (5) For the purposes of paragraph (4)(b), the securitisation entity must take reasonable steps to cooperate with AFCA in resolving the complaint, including by: (a) giving reasonable assistance to AFCA in resolving the complaint; and (b) identifying, locating and providing to AFCA any documents and information that AFCA reasonably requires for the purposes of resolving the complaint; and (c) giving effect to any determination made by AFCA in relation to the complaint. (6) For the purposes of paragraph 327(1)(i) of the Act, an application may be made to the Administrative Review Tribunal for review of a decision of ASIC under subregulation (4). > Note: For notice requirements relating to reviewable decisions, see section 328 of the Act. #### 23D Persons exempt from requiring a licence—employment agencies (1) For the purposes of paragraph 110(1)(a) of the Act, this regulation exempts certain persons engaging in a credit activity from: (a) section 29 of the Act; and (b) definitions in the Act, as they apply to references in the provisions mentioned in paragraph (a); and (c) instruments made for the purposes of any of the provisions mentioned in paragraphs (a) and (b). > Note: Section 29 of the Act provides that a person must not engage in a credit activity if the person does not hold a licence authorising the person to engage in the credit activity. (2) The person is exempted only to the extent that the person is engaging in the specified credit activity. > Note: If the person also engages in a credit activity that is not the subject of an exemption under the Act, the person is not exempted in relation to that credit activity. (3) The person is exempted if the person engages in a credit activity while performing functions, or exercising powers, in the following circumstances: (a) the person provides a person to a licensee, registered person or a representative of a licensee or registered person; and (b) that person engages in a credit activity on behalf of the licensee or registered person only as a person described in regulation 25H or 25I. > Note: Regulation 25H relates to temporary staff. Regulation 25I relates to locums. (4) For the purposes of paragraph 110(1)(c) of the Act, the provisions of the Act to which Part 2‑6 of Chapter 2 of the Act applies apply in relation to the person as if subsection 29(4) of the Act were omitted. #### Subdivision 1.2—Activities exempt from being credit activities under the Act #### 24 Activities exempt from being credit activities (1) For the purposes of paragraphs 110(1)(b) and (c) of the Act, this regulation: (a) exempts certain credit activities, or classes of credit activities, from all of the provisions to which Part 2‑6 of the Act applies; and (b) modifies specified provisions for the purposes of the exemption mentioned in paragraph (a). > Note: Section 108 of the Act identifies the provisions to which Part 2‑6 of the Act applies. (2) Subject to subregulation (3), the following credit activities are exempted: (a) the providing of credit assistance by a lawyer in his or her professional capacity in relation to matters of law, legal interpretation or the application of the law to any facts; (b) the providing of any credit assistance not mentioned in paragraph (a) by a lawyer in the ordinary course of activities as a lawyer that is reasonably regarded as a necessary part of those activities. (3) For subregulation (2), the credit activity is exempted only if the lawyer providing the credit assistance does not hold out or advertise to consumers that he or she is able to provide credit services. (4) Subject to subregulation (4A), a credit activity, other than the provision of credit assistance mentioned in subregulation (2), is exempted if it is engaged in by a lawyer in the following circumstances: (a) the lawyer is acting: (i) on the instructions of a client, an associate of the client or a relative of the client; and (ii) in his or her professional capacity; and (iii) in the ordinary course of his or her activities as a lawyer; (b) the credit activity can reasonably be regarded as a necessary part of those activities; (c) the lawyer has not received, and will not receive, from the client or from another person on behalf of the client a benefit in connection with those activities other than: (i) the payment of professional charges in relation to those activities; and (ii) reimbursement for expenses incurred or payment on account of expenses to be incurred on behalf of the client, an associate of the client or a relative of the client; (d) the lawyer does not hold out or advertise to consumers that he or she is able to provide credit services or debt management services. (4A) For the purposes of subregulation (4), the credit activity is not exempted if: (a) the credit activity is the provision of a debt management service; and (b) a third party holds out or advertises to consumers that the lawyer is able to provide a debt management service; and (c) there is an arrangement between the third party and the lawyer by which the third party regularly refers persons for the purpose of being provided a debt management service. (5) A credit activity is exempted if: (a) it is engaged in by a tax agent in the following circumstances: (i) the tax agent is registered under Part 2 of the Tax Agent Services Act 2009; (ii) the tax agent engages in the credit activity in the ordinary course of activities as a tax agent; and (b) it is a credit activity mentioned in item 2 of the table in subsection 6(1) of the Act; and (c) it does not involve providing a certificate or assessment (however described) relating to whether a consumer will be able to meet financial obligations under a credit contract or consumer lease. (6) A credit activity is exempted if: (a) the credit activity consists only of a person (person 1) passing on, publishing, distributing or otherwise disseminating a document that was provided or approved by another person (person 2); and (b) person 2: (i) is not acting on behalf of person 1; and (ii) is a licensee, registered person or exempt special purpose funding entity; and (c) person 1 is not otherwise required to hold an Australian credit licence to engage in credit activities; and (d) either: (i) for a consumer in relation to the credit activity mentioned in paragraph (a): (A) person 1 advises the consumer that person 2 is a licensee, registered person or exempt special purpose funding entity; and (B) if person 2 is a licensee—person 1 gives the consumer the licence number of person 2; and (C) if person 2 is an exempt special purpose funding entity—person 1 gives the consumer the licence number of the licensee who is party to the servicing agreement with the entity; or (ii) a reasonable person would not consider that person 1 is the licensee, registered person or exempt special purpose funding entity in relation to credit activities being engaged in by person 2; and (e) person 2 approved the content of the document. (7) A credit activity is exempted if: (a) the credit activity consists only of a person (person 1) allowing another person (person 2) to use person 1’s business name, logo or trade mark in relation to: (i) the passing on, publishing, distributing or other dissemination of a document; or (ii) a credit contract, consumer lease, mortgage or guarantee provided or offered by person 2; or (iii) a credit activity engaged in by person 2; and (b) person 2: (i) is not acting on behalf of person 1; and (ii) is a licensee, registered person or exempt special purpose funding entity; and (c) person 1 is not otherwise required to hold an Australian credit licence to engage in credit activities; and (d) either: (i) for a consumer in relation to a credit activity mentioned in paragraph (a): (A) the person performing the credit activity advises the consumer that person 2 is a licensee, registered person or exempt special purpose funding entity; and (B) if person 2 is a licensee—the person performing the credit activity gives the consumer the licence number of person 2; and (C) if person 2 is an exempt special purpose funding entity—person 1 gives the consumer the licence number of the licensee who is party to the servicing agreement with the entity; or (ii) a reasonable person would not consider that person 1 is the licensee, registered person or exempt special purpose funding entity in relation to credit activities being engaged in by person 2. (8) A credit activity is exempted if: (a) the credit activity consists only of a person (the provider) giving to another person (the inquirer), in response to a request made by the inquirer to the provider, information about: (i) the cost, or an estimate of the likely cost, of a credit contract or a consumer lease offered by a licensee, a registered person or an exempt special purpose funding entity; or (ii) terms and conditions of a credit contract or a consumer lease offered by a licensee, a registered person or an exempt special purpose funding entity; and (b) the provider could have complied with the request by giving the inquirer equivalent information about one or more other credit contracts or consumer leases offered by a licensee, a registered person or an exempt special purpose funding entity; and (c) the provider did not give the inquirer that equivalent information. (9) A credit activity is exempted if it is engaged in by a clerk or cashier in the ordinary course of activities as a clerk or cashier. (10) For the purposes of paragraph 110(1)(c) of the Act, the definition of lawyer in subsection 5(1) of the Act is modified for the purposes of this regulation to provide that lawyer means a duly qualified legal practitioner and, in relation to a person, means such a practitioner acting for the person. ### Division 2—Modifications #### 25 Activities exempt from requiring a licence (1) For the purposes of paragraph 110(1)(b) of the Act, this regulation exempts certain credit activities from: (a) section 29 of the Act; and (b) definitions in the Act, as they apply to references in the provisions mentioned in paragraph (a); and (c) instruments made for the purposes of any of the provisions mentioned in paragraphs (a) and (b). > Note: Section 29 of the Act provides that a person must not engage in a credit activity if the person does not hold a licence authorising the person to engage in the credit activity. (2) A credit activity is exempted if: (a) the activity consists only of: (i) a person (person 1) informing another person (person 2) that a licensee or registered person, or a representative of the licensee or registered person, is able to provide a particular credit activity or a class of credit activities; and (ii) person 1 giving person 2 information about how person 2 may contact the licensee, registered person or representative; and (b) at the time the activity is engaged in, person 1 discloses to person 2: (i) any benefits, including indirect remuneration, that person 1, or an associate of person 1, may receive in respect of the activity; and (ii) any benefits, including indirect remuneration, that person 1, or an associate of person 1, may receive that are attributable to the activity; and (c) the disclosure mentioned in paragraph (b) is provided in the same form as the information mentioned in paragraph (a). (2A) A credit activity is exempted if: (a) the activity consists only of: (i) a person (person 1) informing another person (person 2) that a licensee or registered person, or a representative of the licensee or registered person, is able to provide a particular credit activity or a class of credit activities; and (ii) person 1 giving person 2 information about how person 2 may contact the licensee, registered person or representative; and (iii) person 1 making arrangements enabling person 2 to contact the licensee, registered person or representative by means of a link that can be accessed from a website provided by or for person 1 or an associate of person 1; and (b) at the time the activity is engaged in, person 1 discloses to person 2: (i) any benefits, including indirect remuneration, that person 1, or an associate of person 1, may receive in respect of the activity; and (ii) any benefits, including indirect remuneration, that person 1, or an associate of person 1, may receive that are attributable to the activity; and (c) the disclosure mentioned in paragraph (b) is provided in the same form as the information mentioned in subparagraph (a)(ii). (3) A credit activity is exempted if it is a credit activity engaged in in respect of the provision of credit mentioned in: (a) subsection 6(9) or (11) of the Code; or (b) regulation 52, 54, 55, 56, 57, 60, 61 or 63. (4) A credit activity is exempted if: (a) a person (the referrer) engages in a credit activity before 1 October 2010; and (b) the activity consists only of: (i) the referrer informing another person (the consumer) that a licensee or registered person, or a representative of a licensee or registered person, is able to provide a particular credit activity or a class of credit activities; and (ii) the referrer giving to the licensee, registered person or representative the consumer’s name and contact details; and (iii) the referrer giving to the licensee, registered person or representative a short description of the purpose for which the consumer may want a provision of credit or a consumer lease (if the referrer knows the purpose); and (c) the referrer is not banned from engaging in the credit activity under: (i) a law of a State or Territory; or (ii) Part 2‑4 of the Act; and (d) at the time the activity is engaged in, the referrer discloses to the consumer: (i) any benefits, including indirect remuneration, that the referrer, or an associate of the referrer, may receive in respect of the activity; and (ii) any benefits, including indirect remuneration, that the referrer, or an associate of the referrer, may receive that are attributable to the activity; and (e) the referrer has not required the consumer to pay a fee to any person in relation to the referrer giving to the licensee, registered person or representative the consumer’s name; and (f) the consumer has consented to the referrer giving to the licensee, registered person or representative the consumer’s name; and (g) the referrer engages in the activity as a matter incidental to the carrying on of a business that is not principally making contact with persons for the purpose of giving their names or other details to another person. (5) A credit activity is exempted if: (a) a person (the referrer) engages in a credit activity on or after 1 October 2010 under an agreement with the licensee or registered person or a representative of the licensee or registered person; and (b) the agreement: (i) specifies the conduct in which the referrer can engage as conduct to which the exemption applies; and (ii) is: (A) in writing only; or (B) based on an offer made in writing by the licensee, registered person or representative that has been accepted by the referrer; and (c) the activity consists only of: (i) the referrer informing another person (the consumer) that the licensee or registered person, or a representative of the licensee or registered person, is able to provide a particular credit activity or a class of credit activities; and (ii) the referrer giving to the licensee, registered person or representative the consumer’s name and contact details within 5 business days after informing the consumer; and (iii) the referrer giving to the licensee, registered person or representative a short description of the purpose for which the consumer may want a provision of credit or a consumer lease (if the referrer knows the purpose); and (d) the referrer is not banned from engaging in the credit activity under: (i) a law of a State or Territory; or (ii) Part 2‑4 of the Act; and (e) at the time the activity is engaged in, the referrer discloses to the consumer: (i) any benefits, including indirect remuneration, that the referrer, or an associate of the referrer, may receive in respect of the activity; and (ii) any benefits, including indirect remuneration, that the referrer, or an associate of the referrer, may receive that are attributable to the activity; and (f) the referrer has not required the consumer to pay a fee to any person in relation to the referrer giving to the licensee, registered person or representative the consumer’s name; and (g) the consumer has consented to the referrer giving to the licensee, registered person or representative the consumer’s name; and (h) the referrer engages in the activity as a matter incidental to the carrying on of a business that is not principally making contact with persons for the purpose of giving their names or other details to another person; and (i) the referrer does not conduct a business as part of which the referrer contacts persons face‑to‑face from non‑standard business premises. #### 25A Modifications—credit representatives For the purposes of paragraph 110(1)(c) of the Act, section 67 of the Act applies as if it were modified by adding the following subsections after subsection 67(2): ‘(3) However, if: (a) a person (person 1) purports to authorise a registered person (within the meaning of the Transitional Act) to engage in a credit activity as a credit representative under subsection 64(1) or 65(1); and (b) at the time of making the purported authorisation, person 1 reasonably believes that the registered person will engage in the credit activity only as a credit representative; the authorisation has effect when it is given and is taken not to contravene subsection (1). (4) If the registered person does not request the cancellation of the registered person’s registration within 15 business days after the day on which the authorisation is given, the authorisation mentioned in subsection (3) ceases to have effect at the end of the 15 business days.’. #### 25B Modification—meaning of linked credit provider or linked lessor for regulation 23 For the purposes of paragraph 110(1)(c) of the Act and regulation 23, the definition of linked credit provider of a supplier in subsection 127 of the Code applies as if it were modified to provide that a linked credit provider or a linked lessor of a supplier means a credit provider or lessor: (a) with whom the supplier has a contract, arrangement or understanding relating to: (i) the supply to the supplier of goods in which the supplier deals; or (ii) the business of supplying goods or services carried on by the supplier; or (iii) the provision of a credit contract or consumer lease: (A) to persons to whom goods or services are supplied by the supplier; and (B) for payment for the goods or services; or (b) to whom the supplier, by arrangement with the credit provider or lessor, regularly refers persons for the purpose of obtaining credit or being provided with a consumer lease; or (c) whose: (i) forms of contract; or (ii) forms of application; or (iii) offers for credit; or (iv) offers to be provided with a consumer lease; are, by arrangement with the credit provider or lessor, made available to persons by the supplier; or (d) with whom the supplier has a contract, arrangement or understanding under which: (i) contracts; or (ii) applications; or (iii) offers for credit; or (iv) offers to be provided with a consumer lease; from the credit provider or lessor may be signed by persons at the premises of the supplier. #### 25C Modification—meaning of linked credit provider for regulation 23A For the purposes of paragraph 110(1)(c) of the Act and regulation 23A, the definition of linked credit provider of a supplier in subsection 127(1) of the Code applies as if it were modified to provide that a linked credit provider of a supplier means a credit provider: (a) with whom the supplier has a contract, arrangement or understanding relating to: (i) the supply to the supplier of goods in which the supplier deals; or (ii) the business of supplying goods or services carried on by the supplier; or (iii) the provision of credit: (A) to persons to whom goods or services are supplied by the supplier; and (B) for payment for the goods or services; or (b) to whom the supplier, by arrangement with the credit provider, regularly refers persons for the purpose of obtaining credit; or (c) whose: (i) forms of contract; or (ii) forms of application; or (iii) offers for credit; are, by arrangement with the credit provider, made available to persons by the supplier; or (d) with whom the supplier has a contract, arrangement or understanding under which: (i) contracts; or (ii) applications; or (iii) offers for credit; from the credit provider may be signed by persons at the premises of the supplier. #### 25D Modification—meaning of services for regulations 23 and 23A For the purposes of paragraph 110(1)(c) of the Act, the definition of services in subsection 204(1) of the Code is modified for the purposes of regulations 23 and 23A to provide that services: (a) includes: (i) insurance; or (ii) professional services; or (iii) a right to services; and (b) does not include: (i) rights in relation to, and interest in, real property; or (ii) services relating to a credit contract or consumer lease that is regulated under the National Credit Code, or would be regulated under the National Credit Code if entered into, other than credit services. #### 25E Modifications—unlicensed carried over instrument lender For the purposes of paragraph 110(1)(c) of the Act, the provisions of the Act to which Part 2‑6 of the Act applies, apply in relation to an unlicensed carried over instrument lender as if the provisions were modified as set out in Schedule 2. > Note: Unlicensed carried over instrument lender is defined in modified subsection 5(1) of the Act as mentioned in item 2.4 of Schedule 2. #### 25F Modifications—ADI in relation to carried over instrument For the purposes of paragraph 110(1)(c) of the Act, section 38 of the Act applies to an ADI in relation to a carried over instrument as if it were modified by substituting the following section: 38 When a license may be granted—ADI in relation to carried over instrument (1) ASIC must grant a licence to an ADI in relation to a carried over instrument if (and must not grant a licence unless) the requirements mentioned in subsection (2), (3) or (4) are met. (2) For subsection (1), the requirements are, if the ADI: (a) is a credit provider, lessor, mortgagee or beneficiary of a guarantee in relation to a carried over instrument (engages in the first credit activity) immediately before 1 July 2010; and (b) intends to engage in a credit activity (the second credit activity) other than the first credit activity on or after 1 July 2010; and (c) applies under section 36 for a licence to engage in the first credit activity and the second credit activity; and (d) includes a statement in the application (in accordance with the requirements of the approved form) to the effect that the ADI will, if granted the licence, comply with its obligations as a licensee. (3) For subsection (1), the requirements are, if the ADI: (a) is a credit provider, lessor, mortgagee or beneficiary of a guarantee in relation to a carried over instrument immediately before 1 July 2010; and (b) does not intend to engage in a credit activity other than in relation to a carried over instrument on or after 1 July 2010; and (c) applies under section 36 for a licence to engage in a credit activity in relation to a carried over instrument; and (d) includes a statement in the application (in accordance with the requirements of the approved form) to the effect that the ADI will, if granted the licence, comply with its obligations as a licensee. (4) For subsection (1), the requirements are, if the ADI: (a) was not a credit provider, lessor, mortgagee or beneficiary of a guarantee in relation to a carried over instrument immediately before 1 July 2010; and (b) applies under section 36 for a licence; and (c) includes a statement in the application (in accordance with the requirements of the approved form) to the effect that the ADI will, if granted the licence, comply with its obligations as a licensee. (5) The license must only authorise the ADI to engage in credit activities that equate (as closely as possible) to the credit activities in relation to which the application was made. #### 25G Modifications—special purpose funding entity (1) For the purposes of paragraphs 110(1)(c) and 164(d) of the Act, the provisions to which Parts 2‑6 and 3‑7 of the Act apply apply in relation to: (a) a special purpose funding entity; or (b) a licensee or registered person who is a party to a servicing agreement with a special purpose funding entity; as if the provisions were modified as set out in Schedule 3. (2) For paragraph (1)(a), each modification in Schedule 3 applies in relation to the special purpose funding entity from the time, or to the extent, that the obligation would apply to the licensee or registered person mentioned in paragraph (1)(b), in accordance with: (a) item 19 of Schedule 1 to the Transitional Act; or (b) item 36 of Schedule 2 to that Act; if the licensee or registered person were the credit provider or the lessor. #### 25H Modifications—temporary staff (1) For the purposes of paragraphs 110(1)(c) and 164(d) of the Act, this regulation applies in relation to a person if: (a) the person’s services are used by a licensee or registered person for a period of not more than 24 months (including any extension or rollover of a contract of engagement); and (b) the person performs substantially the same duties as an employee of the licensee or registered person; and (c) the person is subject to the same, or substantially the same, control and direction as an employee when the person is engaging in credit activities; and (d) the person was not engaged because the person possesses particular skills or experience that would prevent the licensee or registered person from exercising the control and supervision over the person, when the person is engaging in credit activities, that the licensee or registered person can exercise over its employees; and (e) the person is not remunerated predominantly by way of indirect remuneration; and (f) the licensee or registered person does not hold out or represent to consumers that the person is acting other than as an employee. (2) The provisions of the Act to which Part 2‑6 and Part 3‑7 of the Act apply apply as if paragraph 65(6)(c) and sections 71 and 158 of the Act were omitted. #### 25I Modifications—locums (1) For the purposes of paragraph 110(1)(c) of the Act, this regulation applies to a person who: (a) is engaged to replace an employee of a licensee or registered person who is absent from work in that capacity and reasonably expected to return to work; and (b) performs substantially the same duties as the employee; and (c) is subject to the same, or substantially the same, control and direction as the employee when the person is engaging in credit activities. (2) The provisions of the Act to which Part 2‑6 of Chapter 2 of the Act applies apply as if each provision that refers to an employee of a licensee or registered person were modified by referring to: (a) an employee; and (b) a person described in subregulation (1). #### 25J Modification—exempted persons (1) For the purposes of paragraph 110(1)(c) of the Act, this regulation applies to: (a) a person who is exempted from provisions of the Act under subregulation 20(11), 25(4) or (5); and (b) a person who acts on behalf of the person. (2) Section 33 of the Act applies as if it were modified to include provision for section 128 of the Code to apply to any representation, warranty or statement made (whether orally or in writing) by the person in relation to a credit contract or consumer lease: (a) offered by a licensee or registered person; and (b) to which the person’s exemption relates. #### 25K Modification—credit card contracts (1) For paragraph 164(d) of the Act, this regulation applies to a licensee that enters into a credit contract with a consumer in the form of issuing a credit card. (2) The provisions of the Act to which Part 3‑7 of the Act applies apply as if paragraph 128(a) were modified to read: ‘(a) provide a consumer with a credit card for the purpose of entering a credit contract that is formed or entered by: (i) the use by a consumer of the credit card to obtain credit from the licensee; or (ii) the activation by a consumer of the credit card by arrangement with the licensee;’. #### 25L Modification—assignees of credit providers, lessors, mortgagees and beneficiaries of a guarantee For paragraph 164(d) of the Act, the provisions of the Act to which Part 3‑7 of the Act applies apply as if section 10 were modified by adding the following subsection after subsection 10(2): ‘(3) A person mentioned in paragraph (1)(b) is not a credit provider, lessor, mortgagee or beneficiary of a guarantee under a credit contract, consumer lease, mortgage or guarantee while the original credit provider, lessor, mortgagee or beneficiary of the guarantee under the credit contract, consumer lease, mortgage or guarantee continues to receive payments from the debtor, or would continue to do so if the debtor complied with the credit contract, consumer lease, mortgage or guarantee.’. #### 25M Modification—credit card provided before 1 July 2012 For paragraph 164(d) of the Act, the provisions of the Act to which Part 3‑7 of the Act applies apply as if section 133BD were modified by adding the following subsection after subsection 133BD(2): ‘(3) Subsections (1) and (2) do not apply if the application is made using an application form provided by the licensee to the consumer before 1 July 2012.’ Chapter 3—Responsible lending conduct ## Part 3‑1—Preliminary #### 26 Definitions In this Chapter: > disclosure document means any of the following: (a) a credit guide mentioned in section 113, 126, 127, 136, 149, 150, 158 or 160 of the Act; (b) a credit proposal disclosure document mentioned in section 121 of the Act; (c) a lease proposal disclosure document mentioned in section 144 of the Act; (d) a quote mentioned in section 114 or 137 of the Act. > interest rate means the interest rate or rates applicable to: (a) a type of home loan; or (b) a home loan chosen by a consumer. > Note: For the characteristics of a home loan that is a standard form of credit contract, see regulation 28LA. > lender means a person or entity who: (a) may determine the pricing of a standard home loan; and (b) produces the Key Facts Sheet for that home loan. > licensee—see section 4.1 of Schedule 4. > managed contract means a credit contract or consumer lease entered into as a result of credit assistance provided by a mortgage manager under the terms of an agreement the mortgage manager has with a credit provider, lessor or third party to manage the contract or lease. > mortgage manager means a licensee who has a written agreement with: (a) a credit provider or lessor; or (b) a third party who is authorised to act for a credit provider or lessor (under a written agreement with the credit provider or lessor); and > under the terms of which: (c) the licensee is required to manage the relationship with the consumer on a day‑to‑day basis for the credit provider or lessor in accordance with the credit provider’s, lessor’s or third party’s policies and procedures; and (d) the credit contracts, consumer leases and associated documentation used by the licensee are branded or co‑branded with the name of the licensee. > product designer means a licensee who engages in a credit activity only through a written agreement with a credit provider or lessor under the terms of which: (a) the licensee manages a pool of funds from which credit contracts or consumer leases are provided; and (b) the licensee receives indirect remuneration that is worked out in relation to the net profit from operating the pool of funds; and (c) the licensee has responsibility for creating the policy for usage of the credit contracts or consumer leases, including the eligibility requirements for consumers. > relevant provision of the Act is a section of the Act which requires a disclosure document to be provided to a consumer. > trail commission means indirect remuneration that is contingent on a consumer’s conduct after the consumer has entered into a credit contract or consumer lease, and includes indirect remuneration that is dependent on the amount of a repayment, or the number of repayments, made by the consumer under the contract or lease. > volume bonus arrangement means an arrangement between: (a) a credit provider, lessor or other person (the payer); and (b) a licensee or credit representative (the payee); under which the amount of indirect remuneration payable by the payer to the payee increases as the total volume of business arranged by the payee with the payer increases. ## Part 3‑2—Requirements about credit guides #### 26A Credit guide of licensee—to include further information (1) This regulation is made for the following provisions of the Act: (a) paragraphs 113(2)(j) and (3)(b) (credit guide of credit assistance providers for credit contracts); (b) paragraphs 136(2)(j) and (3)(b) (credit guide of credit assistance providers for consumer leases). Payments to third parties (2) The licensee’s credit guide must state if indirect remuneration is likely to be paid by the licensee to a third party for the introduction of credit business or business proposed to be financed by the credit contract or consumer lease and, if indirect remuneration is likely to be paid, include the following: (a) information about the classes of persons to whom such indirect remuneration may be payable; (b) a statement that the consumer may, on request, obtain a reasonable estimate of the amount of indirect remuneration and how it is worked out. Volume bonus arrangements (3) The licensee’s credit guide must include the following information for each credit provider, lessor or other person with whom the licensee has a volume bonus arrangement: (a) a statement that there is a volume bonus arrangement in place with the credit provider, lessor or other person; (b) a statement that the licensee may receive additional indirect remuneration depending on the total volume of business that the licensee arranges with the credit provider, lessor or other person; (c) the person by whom the indirect remuneration is payable; (d) the person to whom the indirect remuneration is payable. Mortgage managers (4) If a mortgage manager is likely to provide credit assistance to the consumer in relation to a managed contract, the mortgage manager’s credit guide must include the following information: (a) an explanation of the relationship between the mortgage manager and the credit provider, lessor or third party; (b) whether the mortgage manager will charge the consumer a fee for providing a credit service. Product designers (5) A product designer’s credit guide must include the following information: (a) an explanation of the relationship between the product designer and the credit provider or lessor; (b) whether the product designer will charge the consumer a fee for providing a credit service. #### 26B Credit guide of credit provider or lessor—information about mortgage managers and product designers (1) This regulation is made for the following provisions of the Act: (a) paragraph 126(2)(g) (credit guide of credit providers); (b) paragraph 149(2)(g) (credit guide of lessors). (2) If a licensee is likely to enter into a credit contract or consumer lease with a consumer as a result of a mortgage manager or a product designer providing credit assistance to the consumer, the licensee’s credit guide must include the information in subregulation (3). (3) The licensee must include an explanation of the relationship between: (a) the licensee and the mortgage manager; or (b) the licensee and the product designer. #### 27 Credit guide of licensees—when information about fees, charges and indirect remuneration is not required (1) This regulation is made for the following provisions of the Act: (a) paragraph 113(3)(a) (credit guide of credit assistance providers for credit contracts); (b) paragraph 136(3)(a) (credit guide of credit assistance providers for consumer leases). (2) The information mentioned in subparagraphs 113(2)(e)(iii) and (g)(ii) and (iii), or 136(2)(e)(iii) and (g)(ii) and (iii), of the Act need not be included in the licensee’s credit guide if: (a) the credit guide includes a statement that the consumer may obtain information from the licensee about: (i) how fees and charges payable by the consumer are worked out; and (ii) a reasonable estimate of the indirect remuneration likely to be received, directly or indirectly, by the licensee and how the indirect remuneration is worked out; and (b) the licensee has in place arrangements to make the information available when requested by the consumer. Credit card contracts (3) The information mentioned in subparagraphs 113(2)(g)(ii) and (iii) of the Act need not be included in the licensee’s credit guide if: (a) the indirect remuneration is payable in relation to a credit card contract; and (b) the credit guide includes the maximum amount of indirect remuneration payable on entering into the contract; and (c) if any additional indirect remuneration is payable during the life of the contract—the credit guide includes a statement that additional indirect remuneration is payable, and includes either: (i) a reasonable estimate of the amount of the additional indirect remuneration; or (ii) if the amount of additional indirect remuneration depends on the consumer’s use of the credit card—information about factors contributing to the amount of indirect remuneration. #### 27A Credit guide of credit representatives—to include further information (1) This regulation is made for paragraph 158(2)(i) of the Act (credit guide of credit representatives). Indirect remuneration paid to third parties (2) The credit representative’s credit guide must state if indirect remuneration is likely to be paid by the credit representative to a third party for the introduction of credit business or business proposed to be financed by the credit contract or consumer lease and, if indirect remuneration is likely to be paid, include the following: (a) information about the classes of persons to whom such indirect remuneration may be payable; (b) a statement that the consumer may, on request, obtain a reasonable estimate of the amount of indirect remuneration and how it is worked out. Information about credit providers or lessors (3) The credit representative’s credit guide must give the following information: (a) if there are 6 or fewer credit providers or lessors that the credit representative conducts business with when providing credit assistance in relation to credit contracts or consumer leases—the names of the credit providers or lessors; (b) if there are more than 6 credit providers or lessors that the credit representative conducts business with when providing credit assistance in relation to credit contracts or consumer leases—the names of the 6 credit providers or lessors with whom the credit representative reasonably believes it conducts the most business. Volume bonus arrangements (4) The credit representative’s credit guide must include the following information for each credit provider, lessor or other person with whom the credit representative has a volume bonus arrangement: (a) a statement that there is a volume bonus arrangement in place with the credit provider, lessor or other person; (b) a statement that the credit representative may receive additional indirect remuneration depending on the total volume of business that the credit representative arranges with the credit provider, lessor or other person; (c) the person by whom the indirect remuneration is payable; (d) the person to whom the indirect remuneration is payable. (5) However, the information in subregulations (3) and (4) is not required to be given if the credit representative’s credit guide is combined in a single document with the licensee’s credit guide. #### 27B Credit guide of credit representatives—when information about fees, charges and indirect remuneration not required (1) This regulation is made for paragraph 158(3)(a) of the Act (credit guide of credit representatives). (2) The information mentioned in subparagraph 158(2)(e)(iii) or (g)(ii) or (iii) of the Act need not be included in the credit guide if: (a) the credit guide includes a statement that the consumer may obtain information from the credit representative about: (i) how fees and charges payable by the consumer are worked out; and (ii) a reasonable estimate of the indirect remuneration likely to be received, directly or indirectly, by the credit representative and how the indirect remuneration is worked out; and (b) the credit representative has in place arrangements to make the information available when requested by the consumer. #### 28 Credit guide of credit representatives—contact details for the AFCA scheme For paragraph 158(3)(a) of the Act, if: (a) a credit representative is not required to be a member of the AFCA scheme; and (b) the credit representative is not a member of the AFCA scheme; the credit representative is not required to include in the credit representative’s credit guide the contact details for a consumer to access the AFCA scheme under paragraph 158(2)(h) of the Act. #### 28B Credit guide—circumstances where not required to update information (1) This regulation is made for subsections 126(3), 149(3) and 160(4) and paragraphs 113(3)(a), 136(3)(a) and 158(3)(a) of the Act. (2) If information contained in a credit guide changes and requires updating, the updated information, other than the information mentioned in subregulation (3), need not be included in the credit guide given to a consumer if: (a) the updated information is less than 93 days old; and (b) the consumer is given a credit guide that contains information that was correct and in accordance with the requirements in the Act at the time it was published. (3) For subregulation (2), the information is contact details for a consumer to access the AFCA scheme, if the person is required to give those contact details. > Note: Regulation 28 sets out circumstances where a credit representative is not required to give contact details for a consumer to access the AFCA scheme. ## Part 3‑3—Requirements about quotes #### 28C Circumstances where no quote required For subsection 114(2A) or 137(2A) of the Act, the circumstances are that: (a) the licensee’s credit guide includes a statement that the licensee does not impose fees or charges on consumers for providing credit assistance and other services; or (b) both the following apply: (i) before the licensee provides credit assistance to a consumer, the licensee does not intend to impose a fee or charge on the consumer for providing the credit assistance or other services; (ii) the licensee’s proposal disclosure document includes a statement that no fee or charge has been imposed on the consumer for credit assistance and other services provided by the licensee to the consumer. #### 28D Quote for providing credit assistance—licensee to give information about fees and charges (1) This regulation is made for the following provisions of the Act: (a) paragraph 114(2)(f) (quote by credit assistance providers for credit contracts); (b) paragraph 137(2)(f) (quote by credit assistance providers for consumer leases). (2) The information given by a licensee under paragraph 114(2)(d) or 137(2)(d) of the Act must be described as follows: (a) for each fee and each charge payable to the licensee that the licensee does not describe under paragraph (b): (i) identify the fee or charge as a fee or charge payable to the licensee; and (ii) include a clear explanation of the type of fee or charge; and (iii) if the fee or charge is not a fixed amount—explain the method used for working out the amount of the fee or charge; and (iv) if the method mentioned under subparagraph (iii) is expressed as a mathematical formula—include a clear explanation of the formula with the formula; and (v) include a reasonable estimate of the maximum amount of the fee or charge, expressed as required by paragraph (c); and (vi) state how frequently the fee or charge is to be paid; and (vii) describe the circumstances when the fee or charge will or will not be payable; and Note: A fee payable to a credit representative of a licensee is a fee payable to the licensee. (b) if the fee or charge is payable to the licensee for payment to another person on the consumer’s behalf—for each fee and each charge that the licensee does not describe under paragraph (a): (i) identify the fee or charge as a fee or charge; and (ii) include a clear explanation of the type of fee or charge; and (iii) include a reasonable estimate of the maximum amount of the fee or charge, expressed as required by paragraph (c); and (c) the maximum amount of each fee or each charge, if known, must be expressed in dollars or, if unknown, in one of the following ways: (i) as a proportion of the amount borrowed or total rental payments and a dollar amount; (ii) as a percentage of the amount borrowed or total rental payments and a dollar amount; (iii) if payable periodically—as a maximum amount for each period and as a maximum amount for the life of the credit contract or consumer lease, both as dollar amounts; and (d) include a statement that clearly identifies the amounts as a quote. (3) The quote must include the maximum amount of fees or charges that will be payable by the consumer to another person, whether or not a credit contract or consumer lease is entered into. (4) The information mentioned in subregulations (2) and (3) must be set out in a way that is easy for the consumer to understand without being required to do any working out or to look elsewhere for additional information. ## Part 3‑4—Requirements about proposal disclosure documents #### 28E Proposal disclosure document—information about fees and charges (1) This regulation is made for the following provisions of the Act: (a) paragraph 121(2)(f) (credit proposal disclosure document of credit assistance providers for credit contracts); (b) paragraph 144(2)(e) (lease proposal disclosure document of credit assistance providers for consumer leases). (2) The information given by a licensee under paragraph 121(2)(a) or 144(2)(a) of the Act must be described as follows: (a) for each fee and each charge payable to the licensee: (i) identify the fee or charge as a fee or charge payable to the licensee; and (ii) include a clear explanation of the type of fee or charge; and (iii) if the fee or charge is not a fixed amount—explain the method used for working out the amount of the fee or charge; and (iv) if the method mentioned under subparagraph (iii) is expressed as a mathematical formula—include a clear explanation of the formula with the formula; and (v) include the amount of the fee or charge, expressed as required by paragraph (b); and (vi) state how frequently the fee or charge is to be paid; and (vii) describe the circumstances when the fee or charge will or will not be payable; and Note: A fee payable to a credit representative of a licensee is a fee payable to the licensee. (b) the amount of each fee or charge must be expressed in one of the following ways: (i) in dollars; (ii) as a proportion of the amount borrowed or total rental payments, expressed in dollars; (iii) as a range of amounts, expressed in dollars; (iv) as a percentage of the amount borrowed or total rental payments and a dollar amount. (3) The information given by a licensee, for the credit provider or lessor, and any other person about whom information must be given, under paragraphs 121(2)(c) and (d), or 144(2)(c) and (d), of the Act, must be described as follows: (a) for each fee and each charge payable to the credit provider, lessor or other person: (i) name the person to whom the fee or charge is payable personally or on behalf of another person; and (ii) identify the fee or charge as a fee or charge; and (iii) include a clear explanation of the type of fee or charge; and (iv) if the fee or charge is not a fixed amount—explain the method used for working out the amount of the fee or charge; and (v) if the method mentioned under subparagraph (iv) is expressed as a mathematical formula—include a clear explanation of the formula with the formula; and (vi) if the amount of the fee or charge is a reasonable estimate of the fee or charge—state that it is an estimate, and express the amount as required by paragraph (b); and (vii) state how frequently the fee or charge is to be paid; and (viii) describe the circumstances when the fee or charge will or will not be payable; and (b) the reasonable estimate of the amount of each fee or charge must be expressed in one of the following ways: (i) in dollars; (ii) as a proportion of the amount borrowed or total rental payments and a dollar amount; (iii) as a range of amounts, expressed in dollars; (iv) as a percentage of the amount borrowed or total rental payments and a dollar amount. (4) The licensee’s proposal disclosure document must clearly state that the consumer will be liable to pay the fees and charges. (5) The information mentioned in subregulations (2) to (4) must be set out in a way that is easy for the consumer to understand without being required to do any working out or to look elsewhere for additional information. #### 28F Proposal disclosure document—when information about fees and charges not required (1) This regulation is made for the following provisions of the Act: (a) subsection 121(3A) (credit proposal disclosure document of credit assistance providers for credit contracts); (b) subsection 144(3A) (lease proposal disclosure document of credit assistance providers for consumer leases). (2) The licensee’s proposal disclosure document need not contain the information mentioned in subparagraphs 28E(2)(a)(iii) to (vii) and (3)(a)(iv) to (viii) if: (a) the amount of the fee or charge has previously been disclosed in the licensee’s quote for providing credit assistance and the amount has not changed; and (b) the quote was given to the consumer no more than 30 days before the day the licensee is required to provide the consumer with the proposal disclosure document; and (c) the proposal disclosure document includes a statement with the fees and charges that the consumer should refer to the quote for more information about the fees and charges. #### 28G Proposal disclosure document—information about indirect remuneration (1) This regulation is made for the following provisions of the Act: (a) paragraph 121(2)(f) and subsections 121(3) and (3A) (credit proposal disclosure document of credit assistance providers for credit contracts); (b) paragraph 144(2)(e) and subsections 144(3) and (3A) (lease proposal disclosure document of credit assistance providers for consumer leases). (2) A description of the amounts of indirect remuneration must include the following: (a) for each kind of indirect remuneration forming part of the total amount of indirect remuneration, a detailed description of the indirect remuneration, including the following: (i) identification of each kind of indirect remuneration as indirect remuneration; (ii) a clear explanation of the kind of indirect remuneration; (iii) the person by whom each kind of indirect remuneration is payable; (iv) the person to whom each kind of indirect remuneration is payable; (v) a reasonable estimate of the amount of each kind of indirect remuneration, expressed as required by paragraph (b); > Note: Example for subparagraph (ii) > Note: Indirect remuneration that is a benefit described as an advertising subsidy or attendance at a conference. (b) the reasonable estimate of the amount of each kind of indirect remuneration must be expressed in one of the following ways: (i) in dollars; (ii) as a proportion of the amount borrowed or total rental payments and a dollar amount; (iii) as a range of amounts, expressed in dollars; (iv) as a percentage of the amount borrowed or total rental payments and a dollar amount; (v) if the indirect remuneration is in the form of a benefit—the estimated value of the benefit, expressed in dollars; (c) a reasonable estimate of the total amount of indirect remuneration, expressed in dollars, likely to be received by each of the following: (i) the licensee; (ii) a credit representative of the licensee; (d) a reasonable estimate of the total amount of indirect remuneration, expressed in dollars and based on the amounts estimated for each kind of indirect remuneration forming part of the total amount of indirect remuneration. (3) The information mentioned in subregulation (2) must be set out in a way that is easy for the consumer to understand without being required to do any working out or to look elsewhere for additional information. Information not required to be included (4) The proposal disclosure document need not contain the information mentioned in paragraph (2)(c) for an employee or a director of the licensee (even if the employee or director is a credit representative of the licensee). Assumptions (5) For this regulation, a reasonable estimate of an amount of indirect remuneration may be made on the following assumptions: (a) that the consumer will enter into the credit contract or consumer lease on the terms known to the licensee as at the time the consumer is given the proposal disclosure document; (b) that the consumer will make the repayments required by the credit contract or consumer lease at the times required by the contract or lease; (c) that, for an annual percentage rate or default rate, there will be no variation in the rate as disclosed over the whole term of the credit contract or any shorter term for which the contract applies; (d) if the credit contract provides for a change to a variable rate, that the variable rate applicable over the term for which it applies is the same as the equivalent variable rate as at the time the consumer is given the proposal disclosure document; (e) that, if the indirect remuneration, or any part of the indirect remuneration, is contingent on other credit assistance provided by, or activities conducted by, the licensee, the licensee may rely on credit assistance provided, or activities conducted, previously by the licensee for a similar period of time; (f) that the method used to estimate the indirect remuneration in the proposal disclosure document will not change. Payments to third parties (6) The licensee’s proposal disclosure document must state if indirect remuneration is likely to be paid by the licensee to a third party for the introduction of credit business or business proposed to be financed by the credit contract or consumer lease and, if so, must include information about: (a) the person by whom each amount of indirect remuneration is payable; and (b) the person to whom each amount of indirect remuneration is payable; and (c) the amount of indirect remuneration, if known, or a reasonable estimate of the amount of indirect remuneration, expressed in accordance with paragraph (2)(b). > Note: Example of a third party > Note: Indirect remuneration that is payable to a real estate agent who refers a consumer to the licensee. (7) The licensee’s proposal disclosure document need not contain the information mentioned in paragraph (6)(c) if: (a) the amount of indirect remuneration is contingent on the conduct of other consumers who may be referred to the licensee; and (b) the proposal disclosure document includes information about factors contributing to the amount of indirect remuneration payable by the consumer. Volume bonus arrangements (8) The licensee’s proposal disclosure document must set out a reasonable estimate of the maximum amount of indirect remuneration likely to be received by the licensee in relation to the credit contract or consumer lease that will result from a volume bonus arrangement. #### 28H Proposal disclosure documents—when information about indirect remuneration not required (1) This regulation is made for the following provisions of the Act: (a) subsection 121(3A) (credit proposal disclosure document of credit assistance providers for credit contracts); (b) subsection 144(3A) (lease proposal disclosure document of credit assistance providers for consumer leases). Mortgage managers (2) Subregulation (3) applies to indirect remuneration worked out on the difference between the interest rate charged to the mortgage manager by the credit provider or lessor and the interest rate payable by the consumer. (3) The information mentioned in subparagraph 28G(2)(a)(v) and paragraphs 28G(2)(c) and (d) need not be included for the indirect remuneration in the mortgage manager’s proposal disclosure document if all of the following apply: (a) the mortgage manager provided credit assistance to the consumer in relation to a managed contract; (b) the mortgage manager told the consumer: (i) about the mortgage manager’s written agreement with the credit provider, lessor or third party; and (ii) that the mortgage manager is not acting for the consumer in relation to the managed contract; (c) the maximum cost of the managed contract at the time the mortgage manager provides the credit assistance, and the interest rate to be charged, are published on the credit provider’s or lessor’s website; (d) the mortgage manager cannot increase the interest rate above the interest rate that is published under paragraph (c). Product designers (4) A product designer’s proposal disclosure document need not include the information mentioned in subparagraph 28G(2)(a)(v) and paragraphs 28G(2)(c) and (d) for indirect remuneration worked out in relation to the net profit from operating the pool of funds from which credit contracts or consumer leases are provided. Trail commissions (5) For trail commission that is payable in more than one instalment, the licensee’s proposal disclosure document need not contain the information mentioned in subparagraph 28G(2)(a)(v) or paragraph 28G(2)(c) if: (a) the proposal disclosure document includes a reasonable estimate of the highest instalment of trail commission the licensee can expect to receive; and (b) the highest instalment of trail commission is expressed in accordance with paragraph 28G(2)(b); and (c) the following assumptions apply to the calculation of the highest instalment of trail commission: (i) the assumptions mentioned in subregulation 28G(5); or (ii) other assumptions set out in the licensee’s proposal disclosure document. ## Part 3‑4A—Additional rules relating to low cost credit contracts ### Division 1—Preliminary #### 28HAA Scope of this Part This Part: (a) applies to a licensee if the licensee has made an election under subsection 133BXA(1) of the Act and has not revoked the election; and (b) applies to such a licensee in relation to a credit contract if the credit contract is a low cost credit contract covered by the election. > Note: Under subsection 133BXA(1) of the Act, a licensee may elect that Part 3‑2BA of the Act apply to the licensee in relation to some or all low cost credit contracts. #### 28HAB Definitions In this Part: > unsuitability assessment policy has the same meaning as in the Act. ### Division 2—Unsuitable low cost credit contracts #### 28HAC When inquiries etc. must be made For the purposes of paragraph 133BXB(b) of the Act, the prescribed period is 120 days. #### 28HAD Inquiries about financial situation of consumer (1) For the purposes of subsection 130(2) of the Act, this regulation prescribes inquiries that a licensee must make for the purposes of paragraph 130(1)(b) of the Act before making an assessment of whether a low cost credit contract will be unsuitable for a consumer if the contract is entered, or the credit limit of the contract is increased, in the period covered by the assessment. Credit information (2) If the consumer is an individual, the licensee must seek to obtain from a credit reporting body the following information about the consumer: (a) the information mentioned in subsection (3); (b) the information mentioned in subsection (4), but only if when the contract is entered or after the credit limit is increased (whichever applies) the sum of: (i) the value of the low cost credit contract; and (ii) the value of each other low cost credit contract the consumer has already entered into with the licensee and that is still in force; will be $2,000 or greater. (3) The information is any information of the following kinds held by the body: (a) identification information (within the meaning of the Privacy Act 1988) about the individual; (b) details of any information requests (within the meaning of the Privacy Act 1988) that have been made in relation to the individual; (c) default information (within the meaning of subsection 6Q(1) or (2) of the Privacy Act 1988) about the individual; (d) payment information (within the meaning of the Privacy Act 1988) about the individual; (e) personal insolvency information (within the meaning of the Privacy Act 1988) about the individual; (f) information about the individual that is information covered by paragraph 6N(k) of the Privacy Act 1988 (which covers certain kinds of publicly available information); (g) new arrangement information (within the meaning of the Privacy Act 1988) about the individual; (h) court proceedings information (within the meaning of the Privacy Act 1988) about the individual. > Note: Under subsection 5(1) of the Act, credit reporting body has the same meaning as in the Privacy Act 1988. (4) The information is information about consumer credit (within the meaning of the Privacy Act 1988) provided to the individual that is consumer credit liability information (within the meaning of that Act) about the individual. (5) To avoid doubt, nothing in this regulation requires or authorises a credit reporting body to disclose information referred to in subsections (3) or (4) to a licensee. Other information (6) The licensee must also seek to obtain information that the licensee reasonably believes to be substantially correct about the following: (a) the income of the consumer; (b) the expenditure of the consumer; (c) any low cost credit contracts, small amount credit contracts or consumer leases to which the consumer is currently a party. ### Division 3—Unsuitability assessment policies #### 28HAE Authority for this Division This Division is made for the purposes of subsection 133BXG(3) of the Act. #### 28HAF Reviewing and updating unsuitability assessment policies (1) A licensee must conduct regular reviews of the licensee’s unsuitability assessment policy. (2) In deciding when to conduct a review of the policy, the licensee must have regard to the licensee’s obligations under subsection 133BXG(2) of the Act (unsuitability assessment policy must be effective). (3) As part of each review, the licensee must: (a) assess whether the policy has been and will continue to be one that, if followed, makes it reasonably likely that the licensee will comply with sections 128 and 131 of the Act (which deal with assessments of unsuitability), as those sections apply in relation to low cost credit contracts; and (b) identify any changes to the policy that would make it more likely that, if the policy is followed, the licensee will comply with those sections, as they apply in relation to low cost credit contracts. (4) For each review, the licensee must ensure that the licensee has regard to information and evidence that the licensee reasonably believes: (a) is accurate; and (b) provides an appropriate basis for assessing the policy as mentioned in paragraph (3)(a) and identifying changes to the policy as mentioned in paragraph (3)(b). (5) If, as part of a review, the licensee identifies changes to the policy of the kind mentioned in paragraph (3)(b), the licensee must ensure that the policy is revised to incorporate those changes as soon as is practicable. ## Part 3‑5—Other obligations #### 28HA Reverse mortgages—credit assistance providers and credit providers to make reasonable inquiries (1) This regulation is made for the purposes of the following provisions of the Act: (a) section 115 (obligations of credit assistance providers before providing credit assistance for credit contracts); (b) section 128 (obligations of credit providers before entering credit contracts or increasing credit limits). (2) For the purposes of paragraphs 117(1)(d) and 130(1)(d) of the Act, if the credit to be provided under the credit contract will be used to secure a reverse mortgage over a dwelling or land, the licensee must make reasonable inquiries about the consumer’s requirements and objectives in meeting possible future needs, including: (a) a possible need for aged care accommodation; and (b) whether the consumer prefers to leave equity in the dwelling or land to the consumer’s estate. > Note: The licensee’s inquiries about the consumer’s requirements and objectives are not necessarily limited to the matters referred to in paragraphs (2)(a) and (b). #### 28HB Obtaining and considering information to verify financial situation of consumers Scope of this regulation—small amount credit contracts (1) This regulation applies for the purposes of paragraph 117(1)(e) of the Act, to the extent that paragraph applies: (a) for the purposes of paragraph 115(1)(d) of the Act; and (b) in relation to credit assistance mentioned in subsection 115(1) of the Act that relates to a small amount credit contract. (2) This regulation also applies for the purposes of paragraph 130(1)(e) of the Act, to the extent that paragraph applies in relation to a credit contract mentioned in section 128 of the Act that is a small amount credit contract. Scope of this regulation—consumer leases for household goods (3) This regulation also applies for the purposes of paragraph 140(1)(e) of the Act, to the extent that paragraph applies: (a) for the purposes of paragraph 138(1)(d) of the Act; and (b) in relation to credit assistance mentioned in subsection 138(1) of the Act that relates to a consumer lease for households goods. (4) This regulation also applies for the purposes of paragraph 153(1)(e) of the Act, to the extent that paragraph applies in relation to a consumer lease mentioned in section 151 of the Act that is a consumer lease for households goods. Required steps for licensees (5) The licensee must take the steps set out in subregulation (6) and (if applicable) subregulation (7) to verify the consumer’s financial situation. (6) The licensee must ascertain whether the consumer is receiving a payment (a social security payment) under the Social Security Act 1991. (7) If the licensee ascertains under subregulation (6) that the consumer is receiving a social security payment, then the licensee must obtain, and consider, the information contained in the following documents to verify the consumer’s financial situation: (a) an income statement for the consumer issued by Services Australia during the period of 21 days ending on the day on which the licensee considers the information contained in the income statement; (b) a deduction statement for the consumer issued by Services Australia during the period of 21 days ending on the day on which the licensee considers the information contained in the deduction statement. #### 28J Obligations of credit providers before entering credit contracts or increasing credit limits For section 128 of the Act, if: (a) the credit to be provided under the credit contract will be used for the purchase of a residential property; and (b) the credit will be secured by a mortgage over the property; the period is 120 days. > Note: Section 128 of the Act provides that a licensee must not enter into a credit contract with a consumer, or increase the credit limit of a credit contract with a consumer, on a day unless the licensee has, within 90 days (or other period prescribed by the regulations) before the day, made an unsuitability assessment and made particular inquiries and verification. #### 28JA Inquiries about credit limit For paragraph 130(1)(d) of the Act, a licensee must make reasonable inquiries about the maximum credit limit that a consumer requires. #### 28L Manner of giving disclosure documents (1) This regulation is made for the following provisions of the Act: (a) subsection 113(4) (credit guide of credit assistance providers in relation to credit contracts); (b) subsection 114(3) (quote by credit assistance providers in relation to credit contracts); (c) subsection 121(4) (credit proposal disclosure document of credit assistance providers in relation to credit contracts); (d) subsection 126(4) (credit guide of credit providers in relation to credit contracts); (e) subsection 127(4) (credit guide of assignee credit providers in relation to credit contracts); (f) subsection 136(4) (credit guide of credit assistance providers in relation to consumer leases); (g) subsection 137(3) (quote by credit assistance providers in relation to consumer leases); (h) subsection 144(4) (lease proposal disclosure document of credit assistance providers in relation to consumer leases); (i) subsection 149(4) (credit guide of lessors in relation to consumer leases); (j) subsection 150(4) (credit guide of assignee lessors in relation to consumer leases); (k) subsection 158(4) (credit guide of credit representatives); (l) subsection 160(5) (credit guide of debt collectors). (1A) However, this regulation does not apply in relation to giving a disclosure document for the purposes of a provision listed in paragraph (1)(a), (b), (c), (d), (e), (k) or (l) if the disclosure document relates to a low cost credit contract. (2) In this regulation: > licensee includes a person who is a credit representative of a licensee. (3) A licensee may, with the consent of the consumer, give a disclosure document to the consumer by: (a) making the document available for a reasonable period on the licensee’s information system for retrieval by electronic communication by the consumer; and (b) promptly notifying the consumer by electronic communication that the document is available for retrieval on that information system and the nature of the document; and (c) providing the consumer with the ability to retrieve the document by electronic communication. (4) A consumer may consent to the giving of documents by electronic communication only after being told that, if consent is given: (a) paper documents may no longer be given; and (b) electronic communications must be regularly checked for documents; and (c) consent to the giving of documents by electronic communication may be withdrawn at any time. (5) If a disclosure document is given by sending it to a nominated electronic address or in a manner described in this regulation: (a) it must be in a format that allows it to be saved to an electronic file and to be printed; and (b) at the time it was sent or was made available on the licensee’s information system, it would have been reasonable to expect that the intended recipient would be able to save it to an electronic file and print it. (6) If a disclosure document is not given to a consumer personally, or to a person acting on the consumer’s behalf, the licensee must be reasonably satisfied that the consumer has received the disclosure document before engaging in further credit activities in relation to the consumer’s credit contract or consumer lease. (7) For subregulation (6), a person is not acting on the consumer’s behalf if the person is engaging in credit activities. (8) The licensee may be reasonably satisfied that a consumer has received a disclosure document (unless the consumer advises the licensee otherwise): (a) if the disclosure document is a credit guide and was made available to the consumer for retrieval on the licensee’s information system—when the consumer tells the licensee that he or she has accessed the document on the information system; or (b) in any other case—if the disclosure document was properly addressed to the consumer and sent to that address (including an electronic address or fax number). (9) Two or more disclosure documents may be combined in a single document only if all other requirements of the Act and these Regulations are met. #### 28LA Standard home loans For subsection 133AA(2) of the Act, a standard form of credit contract is a contract for a home loan that: (a) is described in the table; and (b) obliges the consumer to make repayments that repay principal and interest for the full term of the home loan. | Item | Type of loan | Characteristics | | ---- | ----------------------- | --------------------------------------------------------------------------------------- | | 1 | Variable rate home loan | The interest rate on the entire loan balance may vary at the lender’s discretion | | 2 | Fixed rate home loan | The interest rate on the entire loan balance is fixed for the whole or part of the loan | #### 28LB Key Facts Sheets for standard home loans (1) For section 133AB of the Act, Schedule 5 sets out: (a) the Key Facts Sheet for a standard home loan; and (b) requirements for how the information in a Key Facts Sheet is to be prepared for a particular consumer and loan. (2) A Key Facts Sheet that is given to a consumer or published online must meet the following requirements: (a) the Key Facts Sheet must be in A4 size; (b) all text in the Key Facts Sheet must be black on a white background, unless otherwise specified in this regulation; (c) the text, except the heading, in the ‘Description of this home loan’ box must be black on a light blue background; (ca) the text in the second row of the ‘Estimated cost of this home loan’ box must be black on a light blue background; (d) the headings to all boxes must be white on a blue background; (e) all other headings must be blue on a white background. (3) However, if a lender is not able to print the Key Facts Sheet using a colour printer, the lender may print a Key Facts Sheet in black and white. #### 28LBA Key Facts Sheets for credit card contracts (1) For the purposes of section 133BB of the Act, Schedule 6 sets out: (a) the Key Facts Sheet for a credit card contract; and (b) requirements for how the information in a Key Facts Sheet is to be prepared. (2) A Key Facts Sheet is taken to comply with Schedule 6 if: (a) it does not refer to a term or condition that is, or may, only be available to a particular class of consumer; and (b) the term or condition does not cause the consumers in that class to be worse off than they would be under the terms and conditions described in the Key Facts Sheet. > Note: Example: A licensee makes a special promotional offer to customers who have a home loan with the licensee. The terms and conditions of the credit card contract under the offer are more advantageous than the terms and conditions of the credit card contract as described in the Key Facts Sheet. > Note: It would be difficult to provide a new Key Facts Sheet for each promotional offer of this kind. #### 28LBB Application forms in electronic form For the purposes of subsection 133BC(1) of the Act, if a licensee: (a) makes available, in an electronic form, an application form that can be used to apply for a credit card contract; and (b) includes, as part of the electronic form, a hyperlink to a Key Facts Sheet for the contract; the application form is taken to include a Key Facts Sheet for the contract. > Note: Example: A licensee may provide an application form as an online document, in an email, or as an attachment to an email. > Note: Subsection 133BC(1) of the Act requires the Key Facts Sheet to contain up‑to‑date information. #### 28LBC Circumstances in which application form may include out‑of‑date Key Facts Sheet (1) For the purposes of subsection 133BC(3) of the Act, a circumstance in which a licensee may make available an application form that includes a Key Facts Sheet containing information that has ceased to be up‑to‑date is that the information ceased to be up‑to‑date no more than 3 months before the day on which the licensee makes the application form available. (2) If the licensee makes the application form available by means that are under the licensee’s control, the period for which the licensee may make the application form available is 3 months after the day on which the information ceased to be up‑to‑date. (3) For the purposes of subsection 133BC(3) of the Act, a circumstance in which a licensee may make available an application form that includes a Key Facts Sheet containing information that has ceased to be up‑to‑date is that: (a) the application form forms part of an advertisement in a publication published by a third party who is authorised to act for the licensee; and (b) the licensee approved the application form for publication by the third party; and (c) the information in the Key Facts Sheet was up to date when the licensee approved the application form for publication; and (d) the expected date of publication of the advertisement was less than 30 days after the licensee approved the application form for publication. #### 28LBD Circumstances in which up‑to‑date information can be provided otherwise than in Key Facts Sheet For the purposes of subparagraph 133BD(1)(b)(ii) of the Act, a requirement for the provision of up‑to‑date information to a consumer if a Key Facts Sheet contains information that has ceased to be up‑to‑date is that the licensee provides the up‑to‑date information no later than the time at which the licensee provides the consumer with the credit card to which the Key Facts Sheet related. #### 28LBE Meaning of credit limit increase invitation (1) For the purposes of subsection 133BE(6) of the Act, a communication is covered by the definition of credit limit increase invitation in subsection 133BE(5) of the Act if it: (a) includes a proposed credit limit that is higher than the consumer’s existing credit limit; or (b) suggests that a higher credit limit may benefit the consumer. (2) For the purposes of subsection 133BE(6) of the Act, a communication is not covered by the definition of credit limit increase invitation in subsection 133BE(5) of the Act if it only provides generic information about credit limits that is applicable to each consumer who is a party to a credit card contract with the licensee. > Note: Subsection 133BE(6) of the Act provides that the regulations may make provisions that apply to determining whether a communication is covered by the definition of credit limit increase invitation in subsection 133BE(5) of the Act. #### 28LBF Licensee to notify consumer of use of credit card in excess of credit limit (1) For the purposes of subsection 133BH(1) of the Act, if a consumer who is the debtor under a credit card contract has used a card in excess of the credit limit for the contract, the licensee who is the credit provider under the contract must take reasonable steps to notify the consumer of that matter, not later than 2 business days after becoming aware of the use of the card in excess of the limit. (2) However, if: (a) the consumer pays the amount by which the credit limit has been exceeded within 2 business days after the day on which the balance under the credit card contract first exceeds the credit limit; and (b) the licensee has not already notified the consumer when the amount is paid; the licensee is not required to notify the consumer. (3) The licensee is only required to notify the consumer once during a statement period. (4) The licensee must include in the notification information about exceeding the credit limit that is sufficient to lead a reasonable consumer to check the balance under the consumer’s credit card contract. #### 28LBG Fees charges and higher rates of interest For the purposes of paragraph 133BI(1)(c) of the Act, if a licensee provides a form to allow a consumer to consent to have fees, charges or a higher rate of interest charged on a credit card that is used in a way mentioned in subsection 133BI(1) of the Act, the licensee must ensure that the invitation to give consent: (a) allows the consumer to withdraw the consent; and (b) discloses any fee charged in relation to the consumer’s consent; and (c) discloses the fee, charge or higher rate of interest that will be charged on the credit card if it is used in the way mentioned in subsection 133BI(1) of the Act; and (d) explains that the fee may increase at any time, in accordance with the terms of the credit card contract; and (e) explains that fees, charges or a higher rate of interest may be charged on the credit card for the amount by which the balance under the credit card contract exceeds the credit limit; and (f) explains that fees, charges or a higher rate of interest are likely to be charged on the credit card for the statement period in which the credit card was used in a way mentioned in subsection 133BI(1) of the Act. #### 28LBH Records of elections and withdrawals to be kept (1) For the purposes of subsection 133BJ(1) of the Act, if a consumer in relation to a credit card contract has: (a) given a consent covering the imposition of fees or charges, or a higher rate of interest, in relation to the contract; or (b) withdrawn a consent of that kind; the licensee in relation to the contract must keep a record stating that a consent or withdrawal is current and showing the date on which the consent was given or withdrawn. > Note: The consent is described in detail in section 133BI of the Act. (2) The licensee must keep the record for the period during which the consent or withdrawal is in effect. #### 28LBI Agreement to apply payment against particular amount owed For the purposes of subsection 133BP(5) of the Act, a licensee that proposes to agree to a request by a consumer to apply certain payments made under the credit card contract against a particular amount must, before agreeing to the request, advise the consumer that the consumer: (a) may be liable to pay an amount or rate of interest under the agreement that is greater than the consumer would be liable to pay under section 133BQ of the Act; and (b) may withdraw the request at a later time. #### 28LC Reverse mortgages—presumption of unsuitability of credit contract if certain loan to value ratios exist (1) This regulation: (a) is made for the purposes of the following provisions of the Act: (i) paragraph 164(d); (ii) paragraph 118(2)(c) (when the credit contract must be assessed as unsuitable—entering the contract or increasing the credit limit), as modified by subregulation (2); (iii) paragraph 123(2)(c) (prohibition on suggesting or assisting consumers to enter, or increase the credit limit under, unsuitable credit contracts), as modified by subregulation (3); (iv) paragraph 131(2)(c) (when credit contract must be assessed as unsuitable), as modified by subregulation (4); (v) paragraph 133(2)(c) (prohibition on entering, or increasing the credit limit of, unsuitable credit contracts), as modified by subregulation (5); and (b) sets out circumstances in which a credit contract is unsuitable. Modifications of Act (2) For the purposes of paragraph 164(d) of the Act, the provisions to which Part 3‑7 of the Act applies apply as if paragraph 118(2)(c) of the Act were varied to read: “(c) if the regulations prescribe circumstances in which a credit contract is: (i) unsuitable; or (ii) unsuitable unless the contrary is proved; those circumstances will apply to the contract;”. (3) For the purposes of paragraph 164(d) of the Act, the provisions to which Part 3‑7 of the Act applies apply as if paragraph 123(2)(c) of the Act were varied to read: “(c) if the regulations prescribe circumstances in which a credit contract is: (i) unsuitable; or (ii) unsuitable unless the contrary is proved; those circumstances will apply to the contract;”. (4) For the purposes of paragraph 164(d) of the Act, the provisions to which Part 3‑7 of the Act applies apply as if paragraph 131(2)(c) of the Act were varied to read: “(c) if the regulations prescribe circumstances in which a credit contract is: (i) unsuitable; or (ii) unsuitable unless the contrary is proved; those circumstances will apply to the contract;”. (5) For the purposes of paragraph 164(d) of the Act, the provisions to which Part 3‑7 of the Act applies apply as if paragraph 133(2)(c) of the Act were varied to read: “(c) if the regulations prescribe circumstances in which a credit contract is: (i) unsuitable; or (ii) unsuitable unless the contrary is proved; those circumstances will apply to the contract;”. Circumstances (6) A circumstance in which a credit contract is unsuitable unless the contrary is proved is that: (a) the credit contract is part of an arrangement that is a reverse mortgage; and (b) at the time the credit contract is entered into, the youngest borrower under the reverse mortgage is 55 or younger; and (c) the loan to value ratio of the mortgage is higher than 15%. (7) A circumstance in which a credit contract is unsuitable unless the contrary is proved is that: (a) the credit contract is part of an arrangement that is a reverse mortgage; and (b) at the time the credit contract is entered into, the youngest borrower under the reverse mortgage is older than 55; and (c) the loan to value ratio of the mortgage is the sum of; (i) 15%; and (ii) 1% for each year that the borrower is older than 55. > Note: Examples of unsuitable loan to value ratios are: (a) if the youngest borrower is 60, a loan to value ratio that exceeds 20% is unsuitable unless the contrary is proved; and (b) if the youngest borrower is 70, a loan to value ratio that exceeds 30% is unsuitable unless the contrary is proved. (8) In this regulation: > loan to value ratio, in relation to a reverse mortgage over a reverse mortgaged property, is: >  where: A is the amount of credit owed under the credit contract for the reverse mortgage. B is the value of the reverse mortgaged property. #### 28LCA Small amount credit contracts—income requirements (1) For the purposes of subsection 133CC(1) of the Act, this regulation prescribes a requirement for repayments that would be required under a small amount credit contract with a consumer who would be the debtor under the contract. (2) The requirement for a repayment that would be required during a repayment period under such a contract with a consumer is that the sum of: (a) the amount of the repayment; and (b) any other amounts the consumer is required to pay under any other small amount credit contracts during the repayment period; would be equal to or less than 10% of the available income the consumer is reasonably expected to receive during the repayment period. (3) In this regulation: > available income, for a consumer, means the consumer’s income less any amount required to be withheld under Part 2‑5 in Schedule 1 to the Taxation Administration Act 1953 (Pay as you go (PAYG) withholding). > income means income within the ordinary meaning of that expression. > repayment period: each of the following is a repayment period in relation to a small amount credit contract: (a) the period: (i) starting on the day the contract is entered into; and (ii) ending on the first repayment date in relation to the contract; (b) a period: (i) starting on the day after a repayment date in relation to the contract; and (ii) ending on the subsequent repayment date in relation to the contract. #### 28LCB Consumer leases for household goods—income requirements (1) For the purposes of subsection 156B(1) of the Act, this regulation prescribes a requirement for the amount that would be required to be paid under a consumer lease for household goods with a consumer who would be the lessee under the lease. (2) The requirement for the amount is that, for any part of the amount that would be required to be paid during a repayment period under such a lease with a consumer, the sum of: (a) that part of the amount; and (b) any other amounts the consumer is required to pay under any other consumer leases during the repayment period; would be equal to or less than 10% of the available income the consumer is reasonably expected to receive during the repayment period. (3) In this regulation: > available income, for a consumer, means the consumer’s income less any amount required to be withheld under Part 2‑5 in Schedule 1 to the Taxation Administration Act 1953 (Pay as you go (PAYG) withholding). > income means income within the ordinary meaning of that expression. > lease repayment day, in relation to a consumer lease for household goods, means the day on or by which a repayment is required to be made under the lease. > repayment period: each of the following is a repayment period in relation to a consumer lease for household goods: (a) the period: (i) starting on the day the lease is entered into; and (ii) ending on the first lease repayment day in relation to the lease; (b) a period: (i) starting on the day after a lease repayment day in relation to the lease; and (ii) ending on the subsequent lease repayment day in relation to the lease. #### 28LCC Constrained documents and constrained information Constrained documents (1) For the purposes of paragraph 160CA(1)(a) of the Act, the following documents are prescribed: (a) an income statement issued by Services Australia; (b) a deduction statement issued by Services Australia. Constrained information (2) For the purposes of paragraph 160CA(1)(a) of the Act, information that a licensee has obtained as a result of taking the steps prescribed by subregulation 28HB(6) or (7) (obtaining and considering information to verify financial situation of consumers) is prescribed. #### 28LCE Authorisation for deduction (1) For subsection 160E(2) of the Act, a kind of credit contract or consumer lease is any credit contract or consumer lease under which a credit provider or lessor intends to give an employer an instrument as described in subsection 160E(1) of the Act. > Note: Subsection 160E(2) of the Act relates to credit contracts or consumer leases of a kind prescribed by the regulations. (2) For subsection 160E(2) of the Act, the form of statement is set out in Schedule 10. > Note: Schedule 10 sets out the statement within a form of document that a credit provider or lessor may use as the instrument authorising the employer to pay amounts directly to the credit provider or lessor. To comply with the Act, the statement must comply with Schedule 10 whether or not the credit provider or lessor chooses to use the document as the formal instrument. #### 28LCF Unsuitable credit contracts—prescribed circumstances (1) This regulation is made for the following provisions of the Act: (a) paragraph 118(2)(c) (when the credit contract must be assessed as unsuitable—entering contract or increasing the credit limit); (b) paragraph 123(2)(c) (prohibition on suggesting or assisting consumers to enter, or increase the credit limit under, unsuitable credit contracts); (c) paragraph 131(2)(c) (when credit contract must be assessed as unsuitable); (d) paragraph 133(2)(c) (prohibition on entering, or increasing the credit limit of, unsuitable credit contracts). (2) A credit contract is unsuitable for a consumer if: (a) the consumer’s requirements and objectives are to receive an identified amount of credit; and (b) the credit contract is part of an arrangement by which the identified amount of credit is provided, or to be provided, by: (i) 2 or more small amount credit contracts; or (ii) 2 or more medium amount credit contracts; or (iii) a combination of low cost credit contracts, small amount credit contracts or medium amount credit contracts, being a combination that includes contracts of at least 2 of those kinds; and (c) the amount that is payable under the combination of credit contracts (in circumstances in which there is no default by the debtor) is higher than the maximum amount that could be charged under a single credit contract under section 32A of the Code. > Note: Example: The consumer’s requirements and objectives are to receive the sum of $3,300. This could be provided by a medium amount credit contract for $3,300. > Note: However, the credit provider offers to enter into 2 small amount credit contracts with the consumer. The amount of credit under each contract is $1,500 and each term is 12 months. The credit provider is only prepared to advance $3,000 in total, and not $3,300, because the consumer cannot afford the higher repayments that would be required if the amount of credit under these 2 contracts were $3,300. > Note: The consumer agrees to this as the consumer still has a need for $3,000. > Note: The amount payable under each small amount credit contract is an upfront fee of 20% of the amount of $1,500, and a monthly fee of 4% of this amount, or charges of $1,020 for each contract, and total charges of $2,040. The maximum amount that could be charged under a medium amount credit contract for $3,000 would be interest charges of $768 plus an additional fee of $400—a total of $1,168. The consumer has therefore been charged an additional amount of $872. > Note: Each of the 2 small amount credit contracts would be unsuitable. #### 28LD Reverse mortgages—projections of home equity (1) For the purposes of paragraph 133DB(1)(a) of the Act, a projection may be given by the licensee or special purpose funding entity to the consumer in the following way: (a) by mail; (b) by email; (c) by another form of written or electronic communication agreed to by the consumer. (2) For the purposes of subparagraph 133DB(1)(a)(ii) of the Act, the licensee or special purpose funding entity must make the projections in accordance with any instructions for the making of the projections included on the website approved by ASIC for that subparagraph. #### 28LE Reverse mortgage information statement For the purposes of the definition of reverse mortgage information statement in subsection 5(1) of the Act, Schedule 5A sets out the document. ## Part 3‑6—Modifications and exemptions #### 28M Modifications Disclosure requirements (1) For paragraph 164(d) of the Act, the provisions to which Part 3‑7 of Chapter 3 of the Act applies, apply as if the provisions were modified as set out in Schedule 4. Extended time period for consumer assessment (2) Subregulation (3) applies to a licensee to whom the rights of a credit provider under a credit contract have been assigned. (3) For paragraph 164(d) of the Act: (a) paragraph 132(2)(c) of the Act is modified by omitting ‘7 business days’ and inserting ‘15 business days’; and (b) paragraph 132(2)(d) is modified by omitting ’21 business days’ and inserting ‘25 business days’. (4) Subregulation (5) applies to a licensee to whom the rights of a lessor under a consumer lease have been assigned. (5) For paragraph 164(d) of the Act: (a) paragraph 155(2)(c) of the Act is modified by omitting ‘7 business days’ and inserting ‘15 business days’; and (b) paragraph 155(2)(d) is modified by omitting ’21 business days’ and inserting ‘25 business days’. > Note: Paragraph 164(d) of the Act provides that the regulations may provide that Chapter 3 of the Act applies as if specified provisions were omitted, modified or varied as specified in the regulations. #### 28N Exemption—requirement to provide disclosure documents (1) For paragraph 164(a) of the Act, a person who is a licensee or a credit representative engaging in a credit activity is exempted from a relevant provision of the Act, other than section 114 or 137, if: (a) the person gives the consumer information, in writing, about the contact details for a consumer to access the AFCA scheme; or (b) the person has given the information mentioned in paragraph (a) to the consumer within the previous 90 days. (2) The information mentioned in paragraph (1)(a) may be given to the consumer as follows: (a) in the manner set out in regulation 28L; (b) together with some or all of the information mentioned in a relevant provision of the Act. (3) For paragraph 164(a) of the Act, a person who is a credit representative to whom regulation 28 applies is exempted from a relevant provision of the Act. > Note: Regulation 28 sets out circumstances where a credit representative is not required to give contact details for a consumer to access the AFCA scheme. Quotes (4) For paragraph 164(a) of the Act, a licensee providing credit assistance to a consumer is exempted from sections 114 and 137 of the Act if: (a) before the licensee provides credit assistance to a consumer, the licensee has entered into a written contract with the consumer setting out the maximum amount that will be payable by the consumer to the licensee in relation to the licensee’s credit assistance and other services; or (b) both the following apply: (i) before the licensee provides credit assistance to a consumer, the licensee does not intend to impose a fee or charge on the consumer for providing the credit assistance or other services; (ii) the licensee does not impose a fee or charge on the consumer for the licensee’s credit assistance and other services. (5) This regulation ceases to have effect on 1 October 2011. #### 28P Circumstances where credit guide not required Franchisees (1) For paragraph 164(a) of the Act, a person who is a credit representative is exempted from subsection 158(1) of the Act if: (a) the person is authorised by: (i) a licensee; or (ii) a body corporate that is a credit representative of a licensee; to engage in specified credit activities on behalf of the licensee; and (b) the person is: (i) a franchisee of the licensee under a franchise agreement with the licensee; or (ii) an employee or director of a franchisee of the licensee who has a franchise agreement with the licensee; and (c) the franchise agreement: (i) subjects the person to the policies of the licensee; and (ii) requires compliance by the person with the policies of the licensee that were made to give effect to the licensee’s obligations under the licensee’s Australian credit licence; and (d) the credit guide of the licensee explains that the licensee takes responsibility for the credit activities engaged in by the person (or class of persons of which the person is a member). Previous dealings with consumer (2) For paragraph 164(a) of the Act, a person who is a licensee or a credit representative is exempted from subsections 113(1), 126(1), 136(1), 149(1), 158(1) or 160(1) or (2) of the Act if: (a) the person has, in the previous 12 months, given the consumer the person’s credit guide in accordance with the requirements in the Act; and (b) if the person would have been required to give contact details for a consumer to access the AFCA scheme—the contact details for access to the AFCA scheme have not changed. > Note: Regulation 28 sets out circumstances where a credit representative is not required to give contact details for a consumer to access the AFCA scheme. Debt collectors (3) For paragraph 164(a) of the Act, a person who is a licensee or a credit representative is exempted from subsection 160(1) or (2) of the Act if: (a) the person has given the consumer the person’s credit guide in accordance with the requirements of section 113, 136 or 158 of the Act; and (b) the credit guide relates to: (i) the same credit contract as that under which the person is authorised by the credit provider to collect, on behalf of the credit provider, repayments made by the consumer under the credit contract; or (ii) the same consumer lease as that under which the person is authorised by the lessor to collect, on behalf of the lessor, payments made by the consumer under the consumer lease. Product designers (4) For paragraph 164(a) of the Act, a person who is a product designer is exempted from subsection 113(1), 136(1), 158(1) or 160(1) or (2) of the Act if the credit provider or lessor has complied with regulation 26B. #### 28Q Exemption—credit assistance provider with shared responsibility for credit contract (1) For paragraph 164(a) of the Act, this regulation applies to a person in the following circumstances: (a) the person is: (i) a credit assistance provider that: (A) is an ADI; and (B) holds an Australian credit licence, or has applied for an Australian credit licence in an application on which ASIC has not made a decision; and (C) engages in conduct under an agreement with the credit provider; or (ii) a credit representative of a credit assistance provider mentioned in subparagraph (i); (b) the credit provider: (i) is an ADI; and (ii) holds an Australian credit licence or has applied for an Australian credit licence; (c) the agreement between the credit provider and the credit assistance provider allows the credit provider to use the credit assistance provider’s name or any other words, phrases, initials or logo associated with the credit assistance provider on the credit contract and any letter or other material; (d) the credit assistance provider: (i) provides credit assistance in relation to a credit contract connected with the agreement mentioned in paragraph (c) between the credit provider and the provider of credit assistance; and (ii) gives to the credit provider the consumer’s details and any other information requested by the credit provider (if it is a reasonable request) in order to enable the credit provider to make an assessment about the credit contract under section 130 of the Act. (2) The credit assistance provider is exempted from Division 4 and Division 6 of Part 3‑1 of the Act in relation to: (a) a credit contract connected with the agreement mentioned in paragraph (1)(c) between the credit provider and the provider of credit assistance; and (b) an increase in the credit limit of the credit contract. (3) Despite subregulation (2): (a) the credit assistance provider is jointly and severally liable with the credit provider to pay any compensation which the credit provider is ordered to pay to the consumer under section 178 of the Act as a consequence of a breach by the credit provider of Division 4 of Part 3‑2 of the Act in relation to a credit contract (including an increase in the credit limit of a contract) connected with the agreement mentioned in paragraph (1)(c) between the credit provider and the provider of credit assistance; and (b) without prejudice to any other rights or remedies to which a credit provider may be entitled, the credit assistance provider is entitled to be indemnified by the credit provider against any loss or damage suffered by the credit assistance provider through the operation of paragraph (a). #### 28R Exemption—intermediary’s requirement to provide proposal disclosure document (1) For paragraph 164(a) of the Act, a person mentioned in subregulation 28Q(1) is exempted from a requirement in section 121 and 144 of the Act in the circumstances set out in this regulation. (2) The exemption applies if: (a) the consumer is not liable to pay to the person any fees or charges in relation to the credit contract or consumer lease; and (b) at the time, or as soon as practicable after, the person gives credit assistance the person tells the consumer, in writing, that no fees or charges will be payable. (3) If the credit contract is a credit card contract, the consumer must be given information about: (a) any indirect remuneration that the person is likely to receive, directly or indirectly, from credit providers in relation to credit contracts for which the person has provided credit assistance; and (b) the maximum amount of indirect remuneration payable by the consumer on entering into the contract; and (c) if any additional indirect remuneration is payable during the life of the contract—a statement that additional indirect remuneration is payable, and either: (i) a reasonable estimate of the amount of the additional indirect remuneration; or (ii) if the amount of additional indirect remuneration depends on the consumer’s use of the credit card—information about how the indirect remuneration is worked out. (4) If the contract is not a credit card contract, the consumer must be given a reasonable estimate of the total amount of any indirect remuneration that the person is likely to receive in relation to the credit contract or consumer lease, and the method used for working out that amount. (5) The information mentioned in subregulations (3) and (4) must be given, in writing, no more than 15 business days before the day the person would have been required to provide the consumer with a proposal disclosure document. #### 28RB Exemption relating to small businesses Licensees providing credit assistance in relation to applications for credit contracts, or increases to credit limits (1) For the purposes of paragraph 164(a) of the Act, a person that is a licensee is exempted from Divisions 4 and 6 of Part 3‑1 of the Act (other than subsection 115(2) and sections 119 and 124 of the Act) in relation to conduct engaged in by the person on a day in relation to a consumer if: (a) the day occurs in the exemption period (see subregulation (7)); and (b) the conduct consists of providing credit assistance to the consumer in relation to an application by the consumer to: (i) enter into a credit contract with a credit provider (see paragraphs 115(1)(a) and 123(1)(a) of the Act); or (ii) increase the credit limit of a credit contract between the consumer and a credit provider (see paragraphs 115(1)(b) and 123(1)(b) of the Act); and (c) the credit to be provided, or intended to be provided, under: (i) the credit contract; or (ii) the increase to the credit limit of the credit contract; is genuinely for the purposes of a small business operated by the consumer (whether alone or with others); and (d) those purposes are not merely minor or incidental in relation to: (i) if subparagraph (c)(i) applies—the overall purposes of the credit contract; or (ii) if subparagraph (c)(ii) applies—the overall purposes of the increase mentioned in that subparagraph. Licensees providing credit assistance in relation to remaining in credit contracts (2) For the purposes of paragraph 164(a) of the Act, a person that is a licensee is exempted from subsection 115(2) and sections 119 and 124 of the Act in relation to conduct engaged in by the person on a day in relation to a consumer if: (a) the day occurs in the exemption period (see subregulation (7)); and (b) the conduct consists of providing credit assistance to the consumer by suggesting that the consumer remain in a credit contract with a credit provider (see subsections 115(2) and 124(1) of the Act); and (c) any of the following apply: (i) the credit provided under the credit contract was genuinely for the purposes of a small business operated by the consumer (whether alone or with others); (ii) if the credit limit of the credit contract was increased one or more times—the credit provided under at least one of the increased limits was genuinely for the purposes of a small business operated by the consumer (whether alone or with others); (iii) if any remaining credit is available under the credit contract—the consumer intends for all or part of the remaining credit to be applied genuinely for the purposes of a small business operated by the consumer (whether alone or with others); and (d) those purposes are not merely minor or incidental in relation to: (i) if subparagraph (c)(i) applies—the overall purposes of the credit contract; or (ii) if subparagraph (c)(ii) applies—the overall purposes of the increase mentioned in that subparagraph; or (iii) if subparagraph (c)(iii) applies—the overall purposes of the remaining credit mentioned in that subparagraph. Licensees or exempt special purpose funding entities that are credit providers under credit contracts (3) For the purposes of paragraph 164(a) of the Act, a person that is a licensee or an exempt special purpose funding entity is exempted from Divisions 3 and 4 of Part 3‑2 of the Act in relation to conduct engaged in by the person on a day in relation to a consumer if: (a) the day occurs in the exemption period (see subregulation (7)); and (b) the conduct consists of: (i) entering into a credit contract with the consumer (see paragraphs 128(a) and 133(1)(a) of the Act); or (ii) making representations to the consumer in relation to entering into a credit contract with the consumer (see paragraph 128(aa) of the Act); or (iii) increasing the credit limit of a credit contract with the consumer (see paragraphs 128(b) and 133(1)(b) of the Act); or (iv) making representations to the consumer in relation to increasing the credit limit of a credit contract with the consumer (see paragraph 128(ba) of the Act); and (c) the credit to be provided, or intended to be provided, by the person to the consumer under: (i) the credit contract; or (ii) the increase to the credit limit of the credit contract; is genuinely for the purposes of a small business operated by the consumer (whether alone or with others); and (d) those purposes are not merely minor or incidental in relation to: (i) if subparagraph (c)(i) applies—the overall purposes of the credit contract; or (ii) if subparagraph (c)(ii) applies—the overall purposes of the increase mentioned in that subparagraph. Licensees providing credit assistance in relation to applications for consumer leases (4) For the purposes of paragraph 164(a) of the Act, a person that is a licensee is exempted from Divisions 4 and 6 of Part 3‑3 of the Act (other than subsection 138(2) and sections 142 and 147 of the Act) in relation to conduct engaged in by the person on a day in relation to a consumer if: (a) the day occurs in the exemption period (see subregulation (7)); and (b) the conduct consists of providing credit assistance to the consumer in relation to an application by the consumer to enter into a consumer lease with a lessor (see subsections 138(1) and 146(1) of the Act); and (c) the goods to be hired under the consumer lease are genuinely for the purposes of a small business operated by the consumer (whether alone or with others); and (d) those purposes are not merely minor or incidental in relation to the overall purposes of the consumer lease. Licensees providing credit assistance in relation to remaining in consumer leases (5) For the purposes of paragraph 164(a) of the Act, a person that is a licensee is exempted from subsection 138(2) and sections 142 and 147 of the Act in relation to conduct engaged in by the person on a day in relation to a consumer if: (a) the day occurs in the exemption period (see subregulation (7)); and (b) the conduct consists of providing credit assistance to the consumer by suggesting that the consumer remain in a consumer lease with a lessor (see subsections 138(2) and 147(1) of the Act); and (c) either: (i) the goods hired under the consumer lease were genuinely for the purposes of a small business operated by the consumer (whether alone or with others); or (ii) the consumer intends for all or some of the goods hired under the consumer lease to be used genuinely for the purposes of a small business operated by the consumer (whether alone or with others); and (d) those purposes are not merely minor or incidental in relation to the overall purposes of the consumer lease. Licensees or exempt special purpose funding entities that are lessors under consumer leases (6) For the purposes of paragraph 164(a) of the Act, a person that is a licensee or an exempt special purpose funding entity is exempted from Divisions 3 and 4 of Part 3‑4 of the Act in relation to conduct engaged in by the person on a day in relation to a consumer if: (a) the day occurs in the exemption period (see subregulation (7)); and (b) the conduct consists of: (i) entering into a consumer lease with the consumer (see paragraph 151(a) and subsection 156(1) of the Act); or (ii) making representations to the consumer in relation to entering a consumer lease with the consumer (see paragraph 151(b) of the Act); and (c) the goods to be hired under the consumer lease are genuinely for the purposes of a small business operated by the consumer (whether alone or with others); and (d) those purposes are not merely minor or incidental in relation to the overall purposes of the consumer lease. Definitions (7) In this regulation: > exemption period means the period that: (a) starts on 3 October 2021; and (b) ends at the start of 3 October 2026. > small business has the same meaning as in section 5 of the Australian Small Business and Family Enterprise Ombudsman Act 2015. ## Part 3‑8—Licensees supplying credit information to credit reporting bodies etc. #### 28TA Ongoing supplies of mandatory credit information (1) For the purposes of item 6 of the table in subsection 133CU(1) of the Act, an event of the kind specified in column 1 of an item in the following table, and information of the kind specified in column 2 for that kind of event, are prescribed. ```html <table cellspacing="0" cellpadding="0" style="border-collapse:collapse"><thead><tr><td colspan="3" style="width:419.25pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Prescribed events and information</span></p></td></tr><tr><td style="width:34.9pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Item</span></p></td><td style="width:234.15pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Column 1</span></p></td><td style="width:128.6pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Column 2</span></p></td></tr><tr><td style="width:34.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span></span></p></td><td style="width:234.15pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Event</span></p></td><td style="width:128.6pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Information</span></p></td></tr></thead><tbody><tr><td style="width:34.9pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:234.15pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Repayment history information (within the meaning of the </span><span style="font-style:italic">Privacy Act 1988</span><span>) comes into existence for an eligible credit account at a particular time (the </span><span style="font-weight:bold; font-style:italic">event time</span><span>), provided that:</span></p><p class="Tablea"><span>(a) mandatory credit information for the account has previously been supplied by the licensee to the credit reporting body under Division</span><span> </span><span>2 of Part</span><span> </span><span>3</span><span>‑</span><span>2CA of the Act; and</span></p><p class="Tablea"><span>(b) if the event time is during the period:</span></p><p class="Tablei"><span>(i) starting on the day after that supply; and</span></p><p class="Tablei"><span>(ii) ending on 30</span><span> </span><span>June 2022;</span></p><p class="Tablea"><span style="width:14.2pt; text-indent:0pt; display:inline-block"></span><span>no arrangement of the kind covered by subregulation</span><span> </span><span>(2) is, or has been, in place in relation to the account during any part of that period that is before the event time; and</span></p><p class="Tablea"><span>(c) if:</span></p><p class="Tablei"><span>(i) the event time is after that period; and</span></p><p class="Tablei"><span>(ii) during any part of that period, one or more arrangements of the kind covered by subregulation</span><span> </span><span>(2) were in place in relation to the account;</span></p><p class="Tablea"><span style="width:14.2pt; text-indent:0pt; display:inline-block"></span><span>all of those arrangements have ceased to be in place before the event time</span></p></td><td style="width:128.6pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>The repayment history information</span></p></td></tr></tbody></table> ``` (2) This subregulation covers an arrangement, in relation to an eligible credit account, if: (a) the arrangement is an agreement, undertaking or other kind of arrangement, whether formal or informal, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; and (b) the arrangement is between: (i) a holder of the account; and (ii) the credit provider with whom the account is held; in relation to the inability of the holder to meet the holder’s obligations relating to consumer credit (within the meaning of the Privacy Act 1988) relating to the account; and (c) the arrangement affects the monthly payment obligations of the holder and is either: (i) a permanent variation to the terms of the consumer credit; or (ii) a temporary relief from or deferral of the holder’s obligations in relation to the consumer credit; (whether the arrangement was entered into before or after this regulation commences). #### 28TB When protected information must not be on‑disclosed (1) For the purposes of subsection 133CZA(2) of the Act, the following conditions are prescribed for a credit reporting body and a credit provider: (a) the protected information (see subsection 133CZA(1) of the Act) was: (i) supplied under Division 2 of Part 3‑2CA of the Act to the credit reporting body; or (ii) derived from information that was supplied under that Division to the credit reporting body; by another credit provider that was a signatory to the principles mentioned in subregulation (3) at the time of that supply; (b) those principles have the effect of restricting the further disclosure of one or more kinds of information (the restricted kinds of information) making up the protected information. (2) For the purposes of subsection 133CZA(2) of the Act, the restricted kinds of information (if any) are prescribed (see paragraph (b) of that subsection). (3) For the purposes of paragraph (1)(a), the principles are those titled “Principles of Reciprocity and Data Exchange”, dated 6 January 2021 and published by the Australian Retail Credit Association, as amended from time to time. > Note: The Principles of Reciprocity and Data Exchange could in 2021 be viewed on the Australian Retail Credit Association website (http://www.arca.asn.au). (4) For the purposes of paragraph (1)(b), if those principles would only restrict the credit reporting body if that body were a signatory to those principles, treat that body as if it were a signatory to those principles. (5) Treat paragraph (1)(b) as ceasing to apply to a restriction if that restriction is subject to conditions and those conditions are met. #### 28TC Reports about initial bulk supplies of credit information—information to be given by licensee Information to be included in statement given after the first bulk supply (1) For the purposes of paragraph 133CZC(1)(a) of the Act, the following kinds of information are prescribed in relation to a statement that is required to be given by a licensee within 6 months after the 1 July referred to in subsection 133CR(1) of the Act: (a) for each eligible credit reporting body to which the licensee must supply mandatory credit information under that subsection: (i) the number of accounts held with the licensee for which mandatory credit information has been supplied to that body under that subsection; and (ii) the number of accounts held with each member of a banking group of which the licensee is the head company for which mandatory credit information has been supplied to that body under that subsection; and (iii) the number of accounts held with the licensee for which mandatory credit information has not been supplied to that body under that subsection; and (iv) the number of accounts held with each member of a banking group of which the licensee is the head company for which mandatory credit information has not been supplied to that body under that subsection; (b) for each account covered by paragraph (a)—the type of that account; (c) for the accounts covered by subparagraph (a)(i) or (ii): (i) the number of those accounts for which a correction under section 21U of the Privacy Act 1988 has been made during the 4‑month period (the 4‑month period) starting on that 1 July; and (ii) the number of those accounts for which a request under section 21V of the Privacy Act 1988 has been made during the 4‑month period; and (iii) the number of those accounts for which a correction has been made during the 4‑month period in response to a request covered by subparagraph (ii); and (iv) the number of those accounts for which a complaint under subsection 23A(2) of the Privacy Act 1988 has been made during the 4‑month period. Information to be included in statement given after the second bulk supply (2) For the purposes of paragraph 133CZC(1)(a) of the Act, the following kinds of information are prescribed in relation to a statement that is required to be given by a licensee within 6 months after the 1 July referred to in subsection 133CR(3) of the Act: (a) for each eligible credit reporting body to which the licensee must supply mandatory credit information under that subsection: (i) the number of accounts held with the licensee for which mandatory credit information has been supplied to that body under that subsection; and (ii) the number of accounts held with each member of a banking group of which the licensee is the head company for which mandatory credit information has been supplied to that body under that subsection; (b) for each account covered by paragraph (a)—the type of that account; (c) for the accounts covered by paragraph (a): (i) the number of those accounts for which a correction under section 21U of the Privacy Act 1988 has been made during the 4‑month period (the 4‑month period) starting on that 1 July; and (ii) the number of those accounts for which a request under section 21V of the Privacy Act 1988 has been made during the 4‑month period; and (iii) the number of those accounts for which a correction has been made during the 4‑month period in response to a request covered by subparagraph (ii); and (iv) the number of those accounts for which a complaint under subsection 23A(2) of the Privacy Act 1988 has been made during the 4‑month period. #### 28TD Reports about initial bulk supplies of credit information—information to be given by credit reporting body Information to be included in statement given after the first bulk supply (1) For the purposes of paragraph 133CZC(2)(a) of the Act, the following kinds of information are prescribed in relation to a statement that is required to be given by a credit reporting body within 6 months after the 1 July referred to in subsection 133CR(1) of the Act: (a) for each licensee required to supply mandatory credit information to the credit reporting body under that subsection—the number of accounts for which such information has been supplied by the licensee to the body under that subsection; (b) the number of disclosures of the body’s protected information made by or on behalf of the body to one or more credit providers during the 4‑month period (the 4‑month period) starting on that 1 July; (c) for the accounts covered by paragraph (a): (i) the number of those accounts for which a correction under section 20S of the Privacy Act 1988 has been made during the 4‑month period; and (ii) the number of those accounts for which a request under section 20T of the Privacy Act 1988 has been made during the 4‑month period; and (iii) the number of those accounts for which a correction has been made during the 4‑month period in response to a request covered by subparagraph (ii); and (iv) the number of those accounts for which a complaint under subsection 23A(1) of the Privacy Act 1988 has been made during the 4‑month period. Information to be included in statement given after the second bulk supply (2) For the purposes of paragraph 133CZC(2)(a) of the Act, the following kinds of information are prescribed in relation to a statement that is required to be given by a credit reporting body within 6 months after the 1 July referred to in subsection 133CR(3) of the Act: (a) for each licensee required to supply mandatory credit information to the credit reporting body under that subsection—the number of accounts for which such information has been supplied by the licensee to the body under that subsection; (b) the number of disclosures of the body’s protected information made by or on behalf of the body to one or more credit providers during the 4‑month period (the 4‑month period) starting on that 1 July; (c) for the accounts covered by paragraph (a): (i) the number of those accounts for which a correction under section 20S of the Privacy Act 1988 has been made during the 4‑month period; and (ii) the number of those accounts for which a request under section 20T of the Privacy Act 1988 has been made during the 4‑month period; and (iii) the number of those accounts for which a correction has been made during the 4‑month period in response to a request covered by subparagraph (ii); and (iv) the number of those accounts for which a complaint under subsection 23A(1) of the Privacy Act 1988 has been made during the 4‑month period. Meaning of protected information (3) In this regulation: > protected information, of a credit reporting body, means: (a) any information that the credit reporting body is supplied under Division 2 of Part 3‑2CA of the Act; or (b) any CRB derived information (within the meaning of the Privacy Act 1988) that is derived from the information referred to in paragraph (a). ## Part 3‑9—Mortgage brokers and mortgage intermediaries ### Division 1—Interpretation #### 28V References to providing credit services to a consumer To avoid doubt, a reference in this Part to a licensee, or a representative of a licensee, providing a credit service to a consumer includes both: (a) the licensee or representative providing credit assistance to the consumer; and (b) the licensee or representative acting as an intermediary between a credit provider and the consumer. #### 28VA Meaning of amount of credit In this Part: > amount of credit has the same meaning as in the Code. ### Division 2—What is conflicted remuneration? #### 28VB Monetary benefit given in certain circumstances not conflicted remuneration (1) This regulation is made for the purposes of paragraph 158NA(b) of the Act. Benefit given by a consumer (2) A monetary benefit given to a licensee, or a representative of a licensee, is not conflicted remuneration if the benefit is given by a consumer in relation to a credit service provided to the consumer by the licensee or representative. Other mortgage broker and mortgage intermediary remuneration (3) A monetary benefit given (whether directly or indirectly) to a licensee, or a representative of a licensee, is not conflicted remuneration if: (a) the benefit relates to a credit service provided by the licensee or representative to a consumer who is a debtor under a credit contract; and (b) the benefit is not a volume‑based benefit; and (c) the benefit is not a campaign‑based benefit; and (d) for a benefit to which the drawdown cap applies under subregulation 28VC(1)—the benefit is one of the following: (i) an amount given on the basis of the credit service provided to the consumer under the credit contract, without reference to a particular amount of credit that may be or has been provided to the consumer; (ii) a benefit that is calculated as a percentage of an amount that is no more than the maximum drawdown net of offset for the credit contract for the year to which the drawdown cap applies in relation to the credit contract (see regulation 28VD); (iii) a benefit that is a combination of either or both of subparagraphs (i) and (ii); and (e) the clawback requirements are satisfied in relation to the benefit (if applicable). (4) A benefit is taken to be a benefit described in subparagraph (3)(d)(ii) if: (a) the benefit is a monetary benefit given (whether directly or indirectly) to a licensee, or a representative of a licensee; and (b) the benefit relates to a credit service provided by the licensee or representative to a consumer who is a debtor under a credit contract; and (c) the benefit is calculated as a percentage of an amount that is greater than the maximum drawdown net of offset for the credit contract for the year to which the drawdown cap applies in relation to the credit contract; and (d) the use of that greater amount is a result of a mistaken but reasonable estimation of what the maximum drawdown net of offset for the credit contract would be for the year to which the drawdown cap applies in relation to the credit contract; and (e) the difference between the following amounts is refunded by the licensee or representative to the person who paid the benefit within 3 months after the end of the year to which the drawdown cap applies in relation to the credit contract: (i) the benefit paid to the licensee or representative; (ii) the benefit that would have been paid to the licensee or representative if the correct maximum drawdown net of offset for the credit contract for the year to which the drawdown cap applies in relation to the credit contract had been used. #### 28VC Benefits to which the drawdown cap applies (1) The drawdown cap applies to a monetary benefit given (whether directly or indirectly) to a licensee, or a representative of a licensee, if: (a) the benefit relates to a credit contract secured by a mortgage over residential property; and (b) the benefit does not relate to a reverse mortgage; and (c) the benefit does not relate to a line of credit facility; and (d) the benefit does not relate to: (i) the provision of credit under a home renovation or improvement facility; or (ii) the provision of credit wholly or partly to refinance credit, where the original or additional credit is provided under a home renovation or improvement facility; and (e) the benefit is given within 1 year beginning on: (i) for the provision of credit that is not wholly or partly to refinance credit—the first day on which an amount of credit is provided to the consumer under the credit contract; or (ii) for the provision of credit that is wholly or partly to refinance credit—the first day on which an amount of credit is provided to the consumer under the credit contract after the refinanced credit is made available. (2) The year to which the drawdown cap applies in relation to a credit contract is the period worked out under paragraph (1)(e). (3) A line of credit facility means a facility made available under a continuing credit contract under which the debtor is not obliged to repay any amounts of credit provided under the facility, or otherwise reduce the debtor’s liability under the facility, until: (a) the debtor’s total liability under the facility (including the amounts of credit provided under the facility, interest charges in relation to the facility and fees and charges payable in relation to the facility) reaches or exceeds the limit specified in the credit contract for the facility; or (b) if credit is available to the debtor under the facility only for a specified period—the period has ended. (4) A home renovation or improvement facility is a facility: (a) made available under a credit contract; and (b) the whole or predominant purpose of which is to provide credit to renovate or improve residential property. #### 28VD Working out the maximum drawdown net of offset for a credit contract (1) To work out the maximum drawdown net of offset for a credit contract under which a consumer is a debtor, for the year to which the drawdown cap applies in relation to the credit contract, first work out, for each day during the year, the difference between: (a) the amount of debt actually deferred under the credit contract, as the amount stands on that day, excluding any excluded amounts but including any interest, fees and charges that do not relate to excluded amounts; and (b) the total of all amounts standing to the credit of the consumer in all offset accounts held by the consumer on that day in relation to the credit contract. (2) The maximum drawdown net of offset for the credit contract, for the year to which the drawdown cap applies in relation to the credit contract, is the greatest amount worked out under subregulation (1) for any day during the year. (3) An excluded amount is an amount of credit that: (a) is provided to a consumer under a credit contract; and (b) relates to a reverse mortgage, a line of credit facility or a home renovation or improvement facility. (4) An offset account, held by a consumer who is a debtor under a credit contract, means a facility held by the consumer in relation to which either of the following applies: (a) the amount standing to the credit of the facility at a particular time is notionally offset against the amount of credit provided to the consumer under the credit contract that has not been repaid at that time, and interest is calculated by reference to the resulting notionally reduced amount of credit; (b) the interest payable under the credit contract is periodically reduced by an amount that would otherwise accrue as interest or other earnings on the amount standing to the credit of the facility from time to time. #### 28VE Volume‑based benefits (1) A benefit is a volume‑based benefit if: (a) access to the benefit, or the value of the benefit, is wholly or partly dependent on the total amount of credit available or provided under credit contracts, or credit contracts of a particular class: (i) that have been entered into by consumers, or a class of consumers; and (ii) in relation to which the consumers, or the class of consumers, were provided credit services by a licensee, or a representative of a licensee; or (b) access to the benefit, or the value of the benefit, is wholly or partly dependent on the number of credit contracts, or the number of credit contracts of a particular class: (i) that have been entered into by consumers, or a class of consumers; and (ii) in relation to which the consumers, or the class of consumers, were provided credit services by a licensee, or a representative of a licensee. (2) If all or part of the monetary benefit given (whether directly or indirectly) to a licensee, or a representative of a licensee, by another person (the benefit giver) is of a kind specified in one of the following paragraphs, then, to the extent that the benefit is of that kind, it is not a volume‑based benefit: (a) a discount on an amount payable to the benefit giver by the licensee or representative that can reasonably be attributed to economies of scale that are gained, or could reasonably be expected to be gained, because of the number or value of credit contracts, or credit contracts of a particular class, in relation to which the licensee or representative provides credit services to consumers; (b) a rebate of an amount paid to the benefit giver by the licensee or representative that can reasonably be attributed to economies of scale that are gained, or could reasonably be expected to be gained, because of the number or value of credit contracts, or credit contracts of a particular class, in relation to which the licensee or representative provides credit services to consumers. #### 28VF Campaign‑based benefits A benefit is a campaign‑based benefit if: (a) the benefit is given to a licensee, or a representative of a licensee, in relation to a credit service provided to a consumer in relation to a credit contract; and (b) access to the benefit, or the value of the benefit, is wholly or partly dependent on the credit service being provided, or the consumer entering the credit contract, during a particular limited period (the campaign period); and (c) either or both of the following apply: (i) the same benefit would not ordinarily be accessible in relation to the same provision of the credit service by the licensee or representative before or after the campaign period; (ii) the value of the benefit is more than the benefit that would ordinarily be given in relation to the same provision of the credit service by the licensee or representative before or after the campaign period. #### 28VG Clawback requirements (1) This regulation applies if: (a) a monetary benefit is, or will be, given to a licensee or a representative of a licensee; and (b) the benefit is in relation to a credit service provided by the licensee or representative to a consumer in relation to a credit contract; and (c) the arrangement under which the benefit is payable includes an obligation (the repayment obligation) to repay all or part of the benefit if the consumer is in default under the credit contract or wholly or partly discharges the credit contract. (2) The clawback requirements in relation to the benefit are: (a) the repayment obligation must not apply for more than 2 years after: (i) for a credit contract under which credit is provided that is not wholly or partly to refinance credit—the first day on which an amount of credit is provided to the consumer under the credit contract; or (ii) for a credit contract under which credit is provided that is wholly or partly to refinance credit—the first day on which an amount of credit is provided to the consumer under the credit contract after the refinanced credit is made available; and (b) the repayment obligation must not require repayment of an amount greater than the benefit given to the licensee or representative; and (c) the consumer must not be subject to an obligation to pay an amount as a result of an amount being required to be repaid under the repayment obligation. #### 28VH Non‑monetary benefit given in certain circumstances not conflicted remuneration (1) This regulation is made for the purposes of paragraph 158NA(b) of the Act. Infrequent benefit valued less than $300 (2) A non‑monetary benefit given to a licensee, or representative of a licensee, who provides credit services to consumers is not conflicted remuneration if: (a) the value of the benefit is less than $300 for each licensee, or each representative of a licensee, who is the final recipient of the benefit; and (b) identical or similar benefits are not given on a frequent or regular basis. Education or training (3) A non‑monetary benefit given to a licensee, or representative of a licensee, who provides credit services to consumers is not conflicted remuneration if: (a) the benefit has a genuine education or training purpose; and (b) the benefit is relevant to the carrying on of a business of providing credit services to consumers; and (c) for a benefit that is the provision of an education or training course—the requirements in subregulation (4) are satisfied in relation to the course; and (d) for a benefit that is not the provision of an education or training course—the dominant purpose of the benefit is education and training. (4) For the purposes of paragraph (3)(c), the requirements are: (a) education or training activities for the professional development of the participants in the course must take up at least: (i) 75% of the time spent on the course; or (ii) 6 hours a day; whichever is the lesser; and (b) the costs of: (i) the participant’s travel and accommodation relating to the course; and (ii) the participant attending events and functions held in conjunction with the course; must be paid for by one or more of the following: (iii) the participant; (iv) the participant’s employer or licensee; (v) if a mortgage intermediary provides services to the participant, or the participant’s employer or licensee, to assist in carrying on a business of providing credit assistance to consumers—the mortgage intermediary. > Note: An example for subparagraph (b)(ii) is the cost of day trips or dinners. (5) In this regulation: > education or training course includes a conference or seminar. IT support (6) A non‑monetary benefit given to a licensee, or representative of a licensee, who provides credit services to consumers is not conflicted remuneration if: (a) the benefit is the provision of information technology software or support; and (b) the benefit is related to the provision of credit services to consumers in relation to credit contracts with the benefit provider. Benefit given by a consumer (7) A non‑monetary benefit given to a licensee, or representative of a licensee, is not conflicted remuneration if the benefit is given: (a) by a consumer to the licensee or representative; and (b) in relation to a credit service provided by the licensee or representative to the consumer in relation to a credit contract. ### Division 3—Circumstances in which conflicted remuneration must not be accepted #### 28VI Circumstances in which a licensee must not accept conflicted remuneration (1) This regulation is made for the purposes of section 158NB of the Act. (2) A licensee must not accept conflicted remuneration if the conflicted remuneration relates to: (a) credit assistance provided by the licensee to a consumer in relation to a credit contract; or (b) whether or how the licensee acts as an intermediary between a credit provider and consumer in relation to a credit contract. (3) However, subregulation (2) does not apply in relation to a credit service provided to a consumer in relation to a credit contract by a credit representative acting within the scope of the credit representative’s actual or apparent authority from the licensee. #### 28VJ Circumstances in which a credit representative must not accept conflicted remuneration (1) This regulation is made for the purposes of subsection 158NC(1) of the Act. (2) A credit representative of a licensee must not accept conflicted remuneration if the conflicted remuneration relates to: (a) credit assistance provided to a consumer in relation to a credit contract by the credit representative acting within the scope of the credit representative’s actual or apparent authority from the licensee; or (b) whether or how the credit representative acts as an intermediary between a credit provider and consumer in relation to a credit contract while acting within the scope of the credit representative’s actual or apparent authority from the licensee. ### Division 4—Circumstances in which conflicted remuneration must not be given #### 28VK Circumstances in which an employer must not give conflicted remuneration (1) This regulation is made for the purposes of subsections 158ND(1) and (2) of the Act. (2) An employer of a licensee must not give conflicted remuneration to the licensee, or a representative of the licensee (other than a credit representative), if it would be a contravention of section 158NB of the Act for the licensee or representative to accept the conflicted remuneration. (3) An employer of a credit representative of a licensee must not give conflicted remuneration to the credit representative if it would be a contravention of subsection 158NC(1) of the Act for the credit representative to accept the conflicted remuneration. #### 28VL Circumstances in which a credit provider must not give conflicted remuneration (1) This regulation is made for the purposes of subsections 158NE(1) and (2) of the Act. (2) A credit provider must not give conflicted remuneration to a licensee, or a representative of the licensee (other than a credit representative), if it would be a contravention of subsection 158NB(1) of the Act for the licensee or representative to accept the conflicted remuneration. (3) A credit provider must not give conflicted remuneration to a credit representative of a licensee if it would be a contravention of subsection 158NC(1) of the Act for the credit representative to accept the conflicted remuneration. #### 28VM Circumstances in which a mortgage intermediary must not give conflicted remuneration (1) This regulation is made for the purposes of subsections 158NF(1) and (2) of the Act. (2) A mortgage intermediary must not give conflicted remuneration to a licensee, or a representative of the licensee (other than a credit representative), if it would be a contravention of section 158NB of the Act for the licensee or representative to accept the conflicted remuneration. (3) A mortgage intermediary must not give conflicted remuneration to a credit representative of a licensee if it would be a contravention of subsection 158NC(1) of the Act for the credit representative to accept the conflicted remuneration. Chapter 4—Administration—registers relating to credit activities #### 29 Credit registers—licensees, credit representatives and registered persons (1) For subsection 213(2) of the Act, ASIC must include the following details for each licensee included in a credit register of licensees: (a) the licensee’s name (including the licensee’s principal business name, if any); (b) the principal business address of the licensee; (c) the date on which the licensee’s Australian credit licence was granted; (d) the number of the licensee’s Australian credit licence; (e) if the licensee has an ABN—the ABN; (f) details of any conditions on the licensee’s Australian credit licence, including details of the credit activities or classes of credit activities that the licensee is authorised to engage in; (ga) whether the licensee is a member of the AFCA scheme; (h) any other information that ASIC believes should be included in the register. (2) Subregulation (3) applies in relation to: (a) credit representatives of licensees; and (b) credit representatives of registered persons. (3) For subsection 213(2) of the Act, ASIC must include the following details for each credit representative included in a credit register of credit representatives: (a) the credit representative’s name (including the credit representative’s principal business name, if any); (b) the credit representative’s principal business address; (c) the number allocated to the credit representative by ASIC; (d) the name of each licensee or registered person for which the credit representative is a credit representative; (e) the: (i) number of the Australian credit licence of each licensee; and (ii) number allocated by ASIC to each registered person; for which the credit representative is a credit representative; (f) if the credit representative has an ABN—the ABN; (g) the date of the credit representative’s authorisation by the licensee or registered person; (ha) whether the credit representative is a member of the AFCA scheme; (i) any other information that ASIC believes should be included in the register. (4) For subsection 213(2) of the Act, ASIC must include the following details for each registered person included in a credit register of registered persons: (a) the registered person’s name (including the registered person’s principal business name, if any); (b) the principal business address of the registered person; (c) the date on which the registered person’s name was entered on the credit register as a registered person; (d) the number allocated to the registered person by ASIC; (e) if the registered person has an ABN—the ABN; (f) details of any conditions on the registered person’s registration, including details of the credit activities or classes of credit activities that the registered person is authorised to engage in; (ga) whether the registered person is a member of the AFCA scheme; (h) any other information that ASIC believes should be included in the register. (5) For paragraphs (1)(b), (3)(b) and (4)(b), if: (a) the person’s principal business address is the person’s residential address; and (b) ASIC determines, in writing, that including the person’s residential address in a register would put at risk the personal safety of the person or members of the person’s family; and (c) the person provides an alternative address: (i) that is in Australia; and (ii) that is not a post office box or an electronic address; and (iii) that has a connection with the credit activities engaged in by the person; and (iv) at which documents can be served on the person; ASIC may include the alternative address in the register. (6) If ASIC includes a person’s alternative address in the register under subregulation (5), the person must, in the approved form: (a) lodge with ASIC notice of the person’s residential address; and (b) lodge with ASIC notice of any change in the person’s residential address within 14 days after the change. (7) If: (a) ASIC includes a person’s alternative address in the register under subregulation (5); and (b) a court gives a judgment for payment of a sum of money against the person; ASIC may give details of the person’s residential address to an officer of the court for the purposes of enforcing the judgment debt. #### 30 Credit registers—persons against whom banning order or disqualification order is made (1) For subsection 213(2) of the Act, ASIC must include the following details for each person against whom a banning order is made under Division 2 of Part 2‑4 of the Act in a credit register of persons against whom a banning order is made: (a) the person’s name; (b) the day on which the banning order took effect; (c) whether the banning order is permanent or for a fixed period; (d) if the banning order is for a fixed period—the period; (e) the terms of the banning order; (f) whether the banning order has been varied or cancelled; (g) if the banning order has been varied: (i) the date of the variation; and (ii) the terms of the variation; (h) if the banning order has been cancelled—the date of the cancellation; (i) any other information that ASIC believes should be included in the register. (2) For subsection 213(2) of the Act, ASIC must include the following details for each person against whom a disqualification order is made under Division 3 of Part 2‑4 of the Act in a credit register of persons against whom a disqualification order is made: (a) the person’s name; (b) the day on which the disqualification order took effect; (c) whether the disqualification order is permanent or for a fixed period; (d) if the disqualification order is for a fixed period—the period; (e) the terms of the disqualification order; (f) whether the disqualification order has been varied or revoked; (g) if the disqualification order has been varied: (i) the date of the variation; and (ii) the terms of the variation; (h) if the disqualification order has been revoked—the date of the revocation; (i) any other information that ASIC believes should be included in the register. (3) For subsection 213(2) of the Act, ASIC must include the following details for each person who is banned from engaging in a credit activity under a law of a State or Territory in a credit register of persons who are banned under a law of a State or Territory: (a) the person’s name; (b) the day on which the ban took effect; (c) whether the ban is permanent or for a fixed period; (d) if the ban is for a fixed period—the period; (e) the terms of the ban; (f) whether the ban has been varied or cancelled; (g) if the ban has been varied: (i) the date of the variation; and (ii) the terms of the variation; (h) if the ban has been cancelled—the date of the cancellation; (i) any other information that ASIC believes should be included in the register. #### 30A Credit register—unlicensed carried over instrument lender (1) For subsection 213(2) of the Act, ASIC must include the following details for each unlicensed carried over instrument lender in a credit register for unlicensed carried over instrument lenders: (a) the lender’s name (including the lender’s principal business name, if any); (b) the postal address of the lender; (c) if the principal business address of the lender is different from the postal address—the principal business address; (d) if the lender has an ABN—the ABN; (e) if the lender is required to engage in credit activities through a registered person or licensee under section 74 of the Act: (i) the reason why the lender is required to engage in the credit activities through the registered person or licensee; and (ii) the name of the registered person or licensee; (g) whether the lender is a member of the AFCA scheme. (2) For paragraph (1)(d), ASIC may include in the credit register an alternative address to the lender’s principal business address if: (a) the lender’s principal business address is the lender’s residential address; and (b) ASIC determines, in writing, that including the lender’s residential address in the register would put at risk the personal safety of the lender or members of the lender’s family; and (c) the lender provides an alternative address: (i) that is in Australia; and (ii) that is not a post office box or an electronic address; and (iii) that has a connection with the credit activities engaged in by the lender. (3) If ASIC includes a lender’s alternative address in the register, the lender must, in the approved form, lodge with ASIC notice of: (a) the lender’s residential address; and (b) any change of the lender’s address no later than 14 days after the change. (4) ASIC may give details of the lender’s residential address to an officer of a court for the purposes of enforcing a judgement debt if: (a) ASIC includes the lender’s alternative address in the register; and (b) the court gives a judgement for payment of a sum of money against the person. Chapter 5—Compliance and enforcement #### 31 Investigations—distribution of report For paragraph 251(2)(d) of the Act, the following are prescribed: (a) the Australian Competition and Consumer Commission; (b) APRA; (c) the Australian Taxation Office; (d) the CEO of the Australian Transaction Reports and Analysis Centre; (e) an authority of a State or Territory having functions and powers similar to those of the Director of Public Prosecutions; (f) the police force or service of each State and the Northern Territory; (g) the Department of Commerce (Office of Fair Trading) of New South Wales; (h) the Department of Justice (Consumer Affairs Victoria) of Victoria; (i) the Department of Employment, Economic Development and Innovation of Queensland; (j) the Department of Commerce of Western Australia; (k) the Office of Consumer and Business Affairs of South Australia; (l) the Office of Consumer Affairs and Fair Trading of Tasmania; (m) the Department of Justice and Community Safety (Office of Regulatory Services) of the Australian Capital Territory; (n) the Department of Justice of the Northern Territory; (o) the Australian Federal Police. #### 32 Examination of person—form of notice requiring assistance and appearance for examination For subsection 253(2) of the Act, Form 1 is prescribed. #### 33 Inspection of books and audit information‑gathering powers—evidence of authority If: (a) an ASIC member or ASIC staff member produces a document issued by ASIC; and (b) the document states that the person is authorised by ASIC under section 268 of the Act; the document is evidence of: (c) the authority of the person to require other persons to produce books or give information under subsection 268(1); and (d) any limitation on that authority that is specified in the document under that subsection. #### 34 Hearings—form of summons to appear before ASIC For subsection 284(1) of the Act, Form 2 is prescribed. #### 35 Miscellaneous provisions—allowances and expenses (1) For subsections 317(1) and (2) of the Act, a person who: (a) appears for examination under section 253 of the Act; or (b) appears pursuant to a summons issued under section 284 of the Act; is entitled to be paid the allowances and expenses set out in this regulation. (2) A person summoned to appear as a witness before ASIC because of his or her professional, scientific or other special skill or knowledge must be paid: (a) if the person is remunerated in his or her occupation by wages, salary or fees—an amount equal to the amount of wages, salary or fees not paid to the person because of his or her attendance for the appearance; and (b) in any other case—an amount of not less than $81, or more than $407, for each day on which he or she so attends. (3) A person summoned to appear as a witness before ASIC, other than a witness mentioned in subregulation (2), must be paid: (a) if the person is remunerated in his or her occupation by wages, salary or fees—an amount equal to the amount of wages, salary or fees not paid to the person because of his or her attendance for the appearance; and (b) in any other case—an amount of not less than $46, or more than $76, for each day on which he or she so attends. (4) A person summoned to appear as a witness before ASIC must be paid a reasonable amount for allowances for: (a) transport between the usual place of residence of the person and the place that he or she attends for the appearance; and (b) if he or she is required to be absent overnight from his or her usual place of residence—meals and accommodation during the absence. Chapter 6—Miscellaneous ## Part 6‑1—Court proceedings #### 36 Where proceedings may be brought (1) For section 330 of the Act, this regulation sets out where court proceedings may be brought. (2) This regulation does not apply to a court proceeding if the court proceeding is: (a) commenced by ASIC; or (b) a class action or representative action on behalf of consumers from more than 1 State or Territory; or (c) commenced by a credit provider under section 112 of the Code for an order under section 113 of the Code. (3) Subject to subregulation (4), a court proceeding must be brought in a court of the State or Territory where the debtor, mortgagor or guarantor ordinarily resides, if the court proceeding: (a) is in relation to: (i) a credit contract; or (ii) a consumer lease; or (iii) a mortgage; or (iv) a guarantee; regulated under the Act; and (b) involves a debtor, mortgagor or guarantor. (4) For subregulation (3), if it is not known where the debtor, mortgagor or guarantor ordinarily resides, the court proceeding must be brought in a court of the State or Territory where the debtor, mortgagor or guarantor ordinarily resided at the time the credit contract, consumer lease, mortgage or guarantee was made. (5) Subject to subregulation (6), a court proceeding should be filed in the registry of a court of the State or Territory where the debtor, mortgagor or guarantor ordinarily resides, if the court proceeding: (a) is in relation to: (i) a credit contract; or (ii) a consumer lease; or (iii) a mortgage; or (iv) a guarantee; regulated under the Act; and (b) involves a debtor, mortgagor or guarantor; and (c) is brought in the Federal Court or the Federal Circuit and Family Court of Australia (Division 2). (6) For subregulation (5), if it is not known where the debtor, mortgagor or guarantor ordinarily resides, the court proceeding must be filed in the registry of a court of the State or Territory where the debtor, mortgagor or guarantor ordinarily resided at the time the credit contract, consumer lease, mortgage or guarantee was made. (7) Subregulation (8) applies if a court proceeding is in relation to a credit contract: (a) that is not a standard form contract (within the meaning of section 12BK of the Australian Securities and Investments Commission Act 2001); and (b) that states that a court proceeding in relation to the credit contract must be brought in a court of a particular State or Territory. (8) For subregulation (7): (a) subregulations (3) to (6) do not apply to the court proceedings; and (b) the court proceeding must be brought in a court of the State or Territory stated in the credit contract. (9) The court proceedings mentioned in subregulations (3), (4) and (8) may be transferred to a court of another State or Territory under Part 4‑3, Division 2, Subdivision C of the Act. ## Part 6‑2—Infringement notices #### 37 Prescribed offences (1) This regulation is made for the purposes of paragraph 288K(1)(b) of the Act. (2) The following provisions of the Act are subject to an infringement notice: (a) subsection 30(3); (b) subsection 31(2); (c) subsection 32(2); (ca) subsection 50B(2); (d) subsection 51(3); (e) subsection 70(2); (f) subsection 73(6); (g) subsection 88(3); (h) subsection 95(4); (i) subsection 98(4); (j) subsection 99(4); (k) subsection 100(5); (l) subsection 122(2); (m) subsection 123(6); (n) subsection 124(6); (o) subsection 124A(2); (p) subsection 124B(2); (q) subsection 133(6); (r) subsection 133AC(3); (s) subsection 133AD(3); (t) subsection 133AE(3); (u) subsection 133BC(2); (v) subsection 133BD(2); (w) subsection 133BH(4); (x) subsection 133BJ(2); (y) subsection 133CA(2); (z) subsection 133CB(2); (za) subsection 133CC(2); (zb) subsection 133DB(2); (zc) subsection 133DC(3); (zd) subsection 133DD(3); (ze) subsection 145(2); (zf) subsection 146(6); (zg) subsection 147(6); (zh) subsection 156(6); (zi) subsection 229(2); (zj) subsections 32A(1) and (2) of the Code. #### 38 Prescribed civil penalty provisions (1) This regulation is made for the purposes of paragraph 288K(1)(c) of the Act. (2) The following civil penalty provisions of the Act are subject to an infringement notice: (aa) subsections 50C(1) and (5); (a) subsections 114(1), (4), (5) and (6); (b) subsections 115(1) and (2); (c) subsection 117(1); (d) subsection 118(1); (e) subsection 119(1); (f) subsection 121(1); (fa) subsection 124B(1); (g) section 128; (h) subsection 130(1); (i) subsection 131(1); (iaa) subsection 133CB(1); (ia) subsections 133CR(1) and (3); (ib) section 133CT; (ic) subsection 133CU(1); (id) section 133CW; (ie) subsections 133CZA(2), (3) and (4); (if) subsections 133CZC(1) and (2); (ig) subsection 133CZG(6); (ih) subsection 133CZH(2); (ii) subsection 133CZI(1); (j) subsections 133DE(1) and (2); (k) subsections 137(1), (4), (5) and (6); (l) subsections 138(1) and (2); (m) subsection 140(1); (n) subsection 141(1); (o) subsection 142(1); (p) subsection 144(1); (pa) subsection 147A(1); (q) section 151; (r) subsection 153(1); (s) subsection 154(2); (sa) subsection 156A(1); (sb) subsection 156C(1); (t) subsection 160B(1); (u) subsection 160C(1); (v) subsections 160E(2) and (3); (w) subsection 39B(1) of the Code; (x) subsection 72(4) of the Code; (xa) subsections 175AA(1) and (2) of the Code; (y) subsection 177B(4) of the Code. #### 39 Prescribed key requirements (1) This regulation is made for the purposes of paragraph 288K(1)(d) of the Act. (2) The following provisions of the Act, to the extent that they relate to key requirements (within the meaning of the Code), are subject to an infringement notice: (a) subsections 17(3), (4), (5), (6), (8), (9), (11), (15) and (15A) of the Code; (b) subsection 23(1) of the Code; (c) subsection 32AA(2) of the Code; (d) subsection 34(6) of the Code; (e) subsection 35(1) of the Code. ## Part 6‑2A—Avoidance schemes #### 40 Avoidance purposes relating to contracts (1) This regulation is made for the purposes of paragraph 323B(1)(c) of the Act. Provision of credit to which the Code does not apply (2) In determining, for the purposes of section 323A of the Act, whether it would be reasonable to conclude that a purpose of a person entering into or carrying out (to any extent) a scheme was an avoidance purpose relating to a contract, regard must be had to whether the provision of any credit under the scheme or contract is not, or would not be, a provision of credit to which the Code applies because of the operation of: (a) paragraph 5(1)(c) of the Code (which is about whether a charge is or may be made for providing the credit); or (b) subsection 6(1) of the Code (which is about short term credit); or (c) subsection 6(5) of the Code (which is about credit for which only an account charge is payable). Provision of credit or financial accommodation—costs and complexity (3) When having regard to a matter referred to in subparagraph 323B(1)(a)(i) or (ii) of the Act in relation to a scheme or contract, regard must be had to whether the scheme or contract does, or may do, any of the following: (a) requires a consumer to pay a fee or charge that could not have been imposed on the consumer under, or in relation to, a small amount credit contract; (b) in relation to a person that has provided, or is to provide, credit or financial accommodation to a consumer under the scheme or contract (the principal scheme or principal contract)—gives the person a right, if the consumer is in default in payment of an amount under the principal scheme or principal contract, to recover from the consumer an amount greater than the amount the person could have recovered in accordance with section 39B of the Code if: (i) the person had been a credit provider under a small amount credit contract with the consumer; and (ii) any credit or financial accommodation that has been, or is to be, provided to the consumer by the person under the principal scheme or principal contract had been, or was to be, provided to the consumer as credit under that small amount credit contract; and (iii) the consumer had been in default in payment of an amount under that small amount credit contract; (c) in relation to a person who has not provided, and will not provide, credit or financial accommodation to a consumer under the scheme or contract—gives the person a right to recover an amount if the consumer is in default in payment of an amount under the scheme or contract; (d) requires a consumer to pay a fee or charge that a reasonable person would think is disproportionate in light of the amount of credit, or the extent of the financial accommodation, provided to the consumer under the scheme or contract; (e) requires a consumer to pay a fee or charge that a reasonable person would regard as high; (f) requires a consumer to pay a fee or charge (the nominated fee or charge), where it is reasonably likely that the consumer will, as a result of that requirement, become liable under the scheme or contract to pay one or more further fees or charges (other than interest fees or charges) in addition to the nominated fee or charge; (g) requires a consumer to pay fees or charges to 2 or more persons. (4) When having regard to a matter referred to in subparagraph 323B(1)(a)(i) or (ii) of the Act in relation to a scheme, regard must also be had to the following matters: (a) whether the scheme involves, or relates to, 2 or more contracts; (b) whether the scheme involves, or relates to, 2 or more contracts entered into at different times; (c) whether the scheme involves, or relates to, a contract between a consumer and 2 or more other persons; (d) whether the scheme involves, or relates to, separate contracts between a consumer and each of 2 or more other persons. Dispute resolution (5) In determining, for the purposes of section 323A of the Act, whether it would be reasonable to conclude that a purpose of a person entering into or carrying out (to any extent) a scheme was an avoidance purpose relating to a contract, regard must be had to the following matters: (a) whether the scheme or contract provides for an internal dispute procedure that satisfies the standards and requirements made or approved by ASIC for the purposes of subparagraph 47(1)(h)(i) of the Act; (b) whether the scheme or contract provides for an independent external dispute resolution procedure; (c) whether the person is a member of the AFCA scheme. #### 41 Avoidance purposes relating to product intervention orders (1) This regulation is made for the purposes of subsection 323B(3) of the Act. Changes in behaviour (2) In determining, for the purposes of section 323A of the Act, whether it would be reasonable to conclude that a purpose of a person (the assessed person) entering into or carrying out (to any extent) a scheme was to avoid the application of a product intervention order made under Part 6‑7A that applies to the assessed person or to an associate of the assessed person, regard must be had to whether the conditions in subregulation (3) or (4) are satisfied. > Note: For associate, see section 15A of the Act. (3) For the purposes of subregulation (2), the conditions in this subregulation are that: (a) the product intervention order applies to the assessed person; and (b) before the order was made, the assessed person had engaged in conduct that would have contravened, or would be likely to have contravened, the order if it had been engaged in after the order was made; and (c) the assessed person has not contravened, is not likely to have contravened, or purports not to have contravened, the order by: (i) entering into or carrying out the scheme; or (ii) any conduct engaged in after entering into or carrying out the scheme. (4) For the purposes of subregulation (2), the conditions in this subregulation are that: (a) the product intervention order applies to an associate of the assessed person; and (b) before the order was made, the associate had engaged in conduct that would have contravened, or would be likely to have contravened, the order if it had been engaged in after the order was made; and (c) the associate has not contravened, is not likely to have contravened, or purports not to have contravened, the order by any conduct engaged in by the associate after the assessed person entered into or carried out the scheme. Detrimental conduct (5) In determining, for the purposes of section 323A of the Act, whether it would be reasonable to conclude that a purpose of a person (the assessed person) entering into or carrying out (to any extent) a scheme was to avoid the application of a product intervention order made under Part 6‑7A of the Act that applies to the assessed person or to an associate of the assessed person, regard must also be had to whether the conditions in subregulation (6) or (7) are satisfied. > Note: For associate, see section 15A of the Act. (6) For the purposes of subregulation (5), the conditions in this subregulation are that: (a) the product intervention order was made in part on the basis that ASIC was satisfied that a credit product or proposed credit product (or class of credit products or proposed credit products) had resulted in, or would result in or would be likely to result in, significant detriment of a certain kind to consumers; and (b) the order applies to the assessed person; and (c) the assessed person has not contravened, is not likely to have contravened, or purports not to have contravened, the order by: (i) entering into or carrying out the scheme; or (ii) any conduct engaged in after entering into or carrying out the scheme; and (d) any of the following conduct has resulted in, or will or is likely to result in, significant detriment to consumers that is of the same or of a similar kind to the detriment referred to paragraph (a) of this subregulation: (i) conduct of the assessed person in entering into or carrying out the scheme; (ii) conduct engaged in by the assessed person, or by an associate of the assessed person, after the assessed person entered into or carried out the scheme. (7) For the purposes of subregulation (5), the conditions in this subregulation are that: (a) the product intervention order was made in part on the basis that ASIC was satisfied that a credit product or proposed credit product (or class of credit products or proposed credit products) had resulted in, or would result in or would be likely to result in, significant detriment of a certain kind to consumers; and (b) the order applies to an associate of the assessed person; and (c) the associate has not contravened, is not likely to have contravened, or purports not to have contravened, the order by any conduct engaged in by the associate after the assessed person entered into or carried out the scheme; and (d) any of the following conduct has resulted in, or will or is likely to result in, significant detriment to consumers that is of the same or of a similar kind to the detriment referred to paragraph (a) of this subregulation: (i) conduct of the assessed person in entering into or carrying out the scheme; (ii) conduct engaged in by the assessed person, or by an associate of the assessed person, after the assessed person entered into or carried out the scheme. Definitions (8) In this regulation: > carry out, in relation to a scheme, includes continuing to carry out the scheme. > credit product has the same meaning as in Part 6‑7A of the Act. ## Part 6‑3—Application, saving and transitional provisions #### 49A Transitional—Schedule 1 to National Consumer Credit Protection Amendment Regulation 2012 (No. 1) (1) This regulation applies if, during the period commencing on the commencement of this regulation and ending on 1 October 2012, a document complies with the requirements for a Key Facts Sheet set out in Schedule 5 as in force immediately before the commencement of Schedule 1 to the National Consumer Credit Protection Amendment Regulation 2012 (No. 1). (2) The document is taken, during that period, to be a Key Facts Sheet that complies with Schedule 5 as amended by Schedule 1 to the National Consumer Credit Protection Amendment Regulation 2012 (No. 1). #### 49B Transitional—Schedule 2 to National Consumer Credit Protection Amendment Regulation 2012 (No. 1) (1) This regulation applies if, during the period commencing on the commencement of this regulation and ending on 1 October 2012, a person complies with a requirement of these Regulations as in force immediately before the commencement of Schedule 2 to the National Consumer Credit Protection Amendment Regulation 2012 (No. 1). (2) The person is taken, during that period, to have complied with these Regulations as amended by Schedule 2 to the National Consumer Credit Protection Amendment Regulation 2012 (No. 1). #### 49C Transitional—Part 1 of Schedule 1 to the Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Regulations 2018 The amendments made by items 4 to 12 and item 14 of Schedule 1 to the Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Regulations 2018 apply on and after the day, under item 44 of Schedule 1 to the Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Act 2018, on and after which the amendments made by Part 3 of Schedule 1 to that Act apply. #### 49D Transitional—Part 2 of Schedule 1 to the Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Regulations 2018 The amendments made by items 15 to 22 and items 24 to 28 of Schedule 1 to the Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Regulations 2018 apply on and after the day, under item 58 of Schedule 1 to the Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Act 2018, on and after which the amendments made by Part 4 of Schedule 1 to that Act apply. #### 49E Transitional—Part 3 of Schedule 1 to the Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Regulations 2018 The amendments made by items 43 to 46 and item 48 of Schedule 1 to the Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Regulations 2018 apply on and after the day, under item 72 of Schedule 1 to the Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Act 2018, on and after which the amendments made by Part 5 of Schedule 1 to that Act apply. #### 49F Application—offences The amendments made by items 43 to 52 of Schedule 1 to the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Regulations 2019 apply in relation to the commission of an offence if the conduct constituting the commission of the offence occurs wholly on or after the commencement of that Schedule. #### 49G Application—civil penalty provisions The amendments made by item 53 of Schedule 1 to the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Regulations 2019 apply in relation to the contravention of a civil penalty provision if the conduct constituting the contravention of the provision occurs wholly on or after the commencement of that Schedule. #### 49H Transitional—Schedule 1 to the Treasury Laws Amendment (AFCA Cooperation) Regulations 2019 The amendments made by items 5, 6 and 7 of Schedule 1 to the Treasury Laws Amendment (AFCA Cooperation) Regulations 2019 apply on and after the commencement of those items in relation to complaints made under the AFCA scheme before, on or after that commencement. #### 49J Application and transitional—Schedule 1 to the National Consumer Credit Protection Amendment (Debt Management Services) Regulations 2021 Application of debt management service reforms—general (1) The debt management service amendments apply (subject to this regulation) in relation to a debt management service provided on or after 1 July 2021, regardless of whether the arrangement under which the service is provided is entered into before, on or after 1 July 2021. Application of debt management service reforms—application for and grant of licences etc. (2) Despite subregulation (1), the debt management service amendments apply on and after the commencement of Schedule 1 to the National Consumer Credit Protection Amendment (Debt Management Services) Regulations 2021 for the purposes of: (a) Divisions 2, 3, 4 and 6 of Part 2‑2 of the Act (which are about licensing of persons who engage in credit activities); and (b) Part 2‑3 of the Act (which is about credit representatives). Transitional arrangements (3) Subregulation (4) applies if: (a) before 1 July 2021, a person (the applicant) lodges an application in the approved form for: (i) a licence authorising the applicant to provide a debt management service; or (ii) ASIC to vary the conditions on the applicant’s licence by authorising the applicant to provide a debt management service; and (b) at the start of 1 July 2021, the application has not been withdrawn by the applicant, or dealt with by ASIC; and (c) the applicant is a member of the AFCA scheme at all times in the period (the transition period) that: (i) starts at the start of 1 July 2021; and (ii) ends when the application is withdrawn by the applicant, or dealt with by ASIC, whichever happens first. > Note: ASIC may deal with the application by granting, or refusing to grant, the licence (see section 37 of the Act), by granting, or refusing to grant, the variation (see sections 45 and 46A of the Act), or by refusing to receive the application (see section 218 of the Act). (4) The following persons are treated as not providing a debt management service during the transition period: (a) the applicant; (b) a person who: (i) is an employee or a director of the applicant or of a related body corporate of the applicant; and (ii) is acting on behalf of the applicant and within the authority of the applicant; (c) a person who: (i) the applicant intends to authorise under section 64 of the Act to engage in debt management services on behalf of the applicant, if the applicant becomes licensed to provide those services; and (ii) could validly be so authorised, having regard to subsections 64(4) and (5) of the Act; and (iii) is authorised in writing by the applicant to act on behalf of the applicant and is acting within that authority; (d) if there is a person covered by paragraph (c) (a prospective credit representative) in relation to the applicant—another person who: (i) the prospective credit representative intends to authorise under section 65 of the Act to engage in debt management services on behalf of the applicant, if the applicant becomes licensed to provide those services and the prospective credit representative becomes an actual credit representative of the applicant; and (ii) could validly be so authorised, having regard to subsections 65(5) and (6) of the Act; and (iii) with the written consent of the applicant, is authorised in writing by the prospective credit representative to act on behalf of the applicant and is acting within that authority. Definitions (5) In this regulation: > debt management service amendments means the amendments made by items 1, 2, 5, 6 and 7 of Schedule 1 to the National Consumer Credit Protection Amendment (Debt Management Services) Regulations 2021. #### 49K Application—Schedule 1 to the National Consumer Credit Protection Amendment (Financial Sector Reform) Regulations 2023 Regulation 28HB, as inserted by Schedule 1 to the National Consumer Credit Protection Amendment (Financial Sector Reform) Regulations 2023, applies in relation to a preliminary assessment, or assessment, referred to in subsection 117(1), 130(1), 140(1) or 153(1) of the Act that occurs on or after 12 June 2023. #### 49L Application and transitional—Part 1 of Schedule 1 to the National Consumer Credit Protection Amendment (Low Cost Credit) Regulations 2025 Low cost credit contracts—fees or charges (1) Regulation 69G, as inserted by Part 1 of Schedule 1 to the National Consumer Credit Protection Amendment (Low Cost Credit) Regulations 2025, applies in relation to contracts entered into before, on or after the commencement of Part 1 of Schedule 2 to the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 (the amending Part). > Note: Regulation 69G applies only on and after the delayed commencement time: see item 8 of Schedule 2 to the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024. Default notices (2) The amendments made by items 7, 8 and 12 to 17 of Part 1 of Schedule 1 to the National Consumer Credit Protection Amendment (Low Cost Credit) Regulations 2025 apply in relation to a default that occurs on or after the commencement of that Schedule. Chapter 7—Matters in relation to the National Credit Code ## Part 7‑1—Exemptions, declarations and other matters #### 50 Continued application of Part 12 of the Code and interpretation provisions (1) This regulation applies despite a statement in a provision of this Part that: (a) the Code does not apply to a particular matter; or (b) the Code, other than a particular provision or provisions (the prescribed provision or provisions), does not apply to a particular matter; or (c) a particular provision or provisions of the Code (the prescribed provision or provisions) does not apply to a particular matter. (2) The Code applies in relation to the particular matter and the prescribed provision or provisions to the extent necessary for the interpretation of the particular matter and the prescribed provision or provisions. (3) Part 12 of the Code applies in relation to the particular matter and the prescribed provision or provisions to the extent the context permits. #### 50A Exemption for short term credit For paragraph 6(1)(b) of the Code: (a) credit fees and charges imposed or provided for under a contract are taken to include a fee or charge specified in the following table if the fee or charge is a credit fee or charge within the meaning of the definition of credit fees and charges in section 204 of the Code; and (b) the fee or charge is taken to be included whether or not it is payable under the contract. ```html <table cellspacing="0" cellpadding="0" style="width:97.98%; border-collapse:collapse"><thead><tr><td colspan="2" style="border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Fees and charges</span></p></td></tr><tr><td style="width:9.02%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Item</span></p></td><td style="width:90.98%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Fee or charge</span></p></td></tr></thead><tbody><tr><td style="width:9.02%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:90.98%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>A fee or charge payable in connection with the supply of the amount of credit provided under the contract.</span></p></td></tr><tr><td style="width:9.02%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:90.98%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>A fee or charge payable in connection with the consumer receiving an amount of credit provided, under the contract, as cash or by transfer to an account.</span></p></td></tr><tr><td style="width:9.02%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:90.98%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>A fee or charge payable in connection with the management or repayment of the amount of credit provided under the contract.</span></p></td></tr></tbody></table> ``` > Note: Example 1: A fee for providing the credit through a stored value card. > Note: Example 2: A fee or charge for obtaining a membership (however described) which is a prerequisite to the debtor obtaining access to a service to receive funds paid by cheque as cash (whether or not with other services). > Note: Example 3: Account keeping fees (however described). #### 51 Exempt credit—maximum account charges For the purposes of subsection 6(5) of the Code, for a continuing credit contract under which the only charge that is or may be made for providing credit: (a) is periodic or fixed; and (b) does not vary according to the amount of credit provided; the prescribed maximum charge for the contract (the eligible contract) is as follows. ```html <table cellspacing="0" cellpadding="0" style="margin-left:0.25pt; border-collapse:collapse"><thead><tr><td colspan="3" style="width:404.8pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Prescribed maximum charge</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Item</span></p></td><td style="width:179.15pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>If:</span></p></td><td style="width:179.15pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Then the prescribed maximum charge is:</span></p></td></tr></thead><tbody><tr><td style="width:24.9pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:179.15pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>the debtor is not already a party to an eligible contract with the credit provider, or with an associate of the credit provider, when the eligible contract is entered into</span></p></td><td style="width:179.15pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tablea"><span>(a) for the 12</span><span>‑</span><span>month period commencing when the debtor enters into the eligible contract—$200; and</span></p><p class="Tablea"><span>(b) for any later 12</span><span>‑</span><span>month period during which the eligible contract is in effect—$125</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:179.15pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>when the eligible contract (the </span><span style="font-weight:bold; font-style:italic">new eligible contract</span><span>) is entered into:</span></p><p class="Tablea"><span>(a) the debtor:</span></p><p class="Tablei"><span>(i) is already; or</span></p><p class="Tablei"><span>(ii) was within the previous 12 months;</span></p><p class="Tablea"><span style="width:14.2pt; text-indent:0pt; display:inline-block"></span><span>a party to an eligible contract with the credit provider or with an associate of the credit provider; and</span></p><p class="Tablea"><span>(b) neither the credit provider nor the associate of the credit provider is an ADI</span></p></td><td style="width:179.15pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tablea"><span>(a) for the 12</span><span>‑</span><span>month period commencing when the debtor enters into the new eligible contract—nil; and</span></p><p class="Tablea"><span>(b) for any later 12</span><span>‑</span><span>month period during which the new eligible credit contract is in effect—nil</span></p></td></tr></tbody></table> ``` > Note: Under subsection 6(5) of the Code, the Code does not apply to the provision of credit under an eligible contract unless the only charge that is or may be made for providing credit under the contract exceeds the maximum charge prescribed by this regulation. #### 52 Additional exempt credit The Code, other than Division 3 of Part 4 and Part 5, does not apply to a contract, other than a continuing credit contract, to the extent that the contract provides for the provision of credit in the following circumstances: (a) the amount of credit to be provided does not at any time exceed $50; (b) there is no insurance financed under the contract; (c) there is no mortgage or guarantee taken by the credit provider; (d) the annual percentage rate for the contract does not exceed the maximum annual percentage rate (if any) for the contract if it were a contract to which the Code applies. > Note: Section 203B of the Code provides, among other things, that the regulations may exempt a contract or a class of contracts from all or specified provisions of the Code. #### 53 GIO Finance Limited’s No Interest Loan Scheme—exemption from Code (1) This regulation applies to the scheme (the No Interest Loan Scheme) that is operated by GIO Finance Limited ACN 002 812 704 in accordance with the deed of agreement executed on 26 June 1992 by the New South Wales Minister for Further Education, Training and Employment and GIO Finance Limited. (2) The Code does not apply to the provision of credit under the No Interest Loan Scheme. > Note: Subsection 6(13) of the Code provides that the regulations may exclude the provision of credit of any class from the Code. #### 54 Rental Purchase Plan—exemption from certain provisions of Code The Code, other than sections 76 to 81, does not apply to a contract to the extent that the contract provides for the provision of credit under the Queensland Government scheme known as the Rental Purchase Plan Scheme, and formerly known as the H.O.M.E. Shared Scheme. > Note: Section 203B of the Code provides, among other things, that the regulations may exempt a contract or a class of contracts from all or specified provisions of the Code. #### 55 Partnership loans—exemption from certain provisions of Code (1) The Code, other than: (a) Part 1; and (b) Division 3 of Part 4; and (c) Divisions 4 and 5 of Part 5; and (d) Part 7; does not apply to a contract to the extent that the contract provides for the provision of credit by a firm, or by a related body corporate of the firm, to a partner of the firm, whether or not the credit is provided to the partner with another person. (2) However, for a credit provider who provides credit in the course of a business of providing credit to which the Code applies to partners of a firm and to others, this regulation applies only to the provision of credit on terms that are more favourable to the debtor than the terms on which the credit provider provides credit to which the Code applies to persons who are not partners of the firm. (3) In this regulation: (a) a partner of a firm includes a former partner of a firm and an employee or former employee of the firm; and (b) a related body corporate of a firm is a body corporate that is ultimately wholly owned by all or some of the partners of the firm or by other persons on their behalf. > Note: Section 203B of the Code provides, among other things, that the regulations may exempt a contract or a class of contracts from all or specified provisions of the Code. #### 56 Student loans—exemption from certain provisions of Code (1) The Code, other than subsection 61(1) and sections 76 to 81, does not apply to a contract to the extent that the contract provides for the provision of credit by a higher educational institution, or by an association of students of the institution, to a student of the institution on the grounds of hardship or of an emergency. (2) However, subsection (1) applies only if the institution or association gives the debtor and any guarantor the following things before the contract for the provision of credit is entered into by the debtor or the guarantee is signed by the guarantor: (a) a statement of the costs of the provision of credit, which must include any fees or charges payable and the interest rate applicable and may include other information; (b) a copy of the terms and conditions of the contract for the provision of credit. (3) In this regulation: > association of students, of a higher educational institution, means a union, guild or other association of students: (a) of the institution; or (b) of the institution and of other higher educational institutions. > higher educational institution means an institution within the meaning given by section 4 of the Higher Education Funding Act 1988. > Note: Section 203B of the Code provides, among other things, that the regulations may exempt a contract or a class of contracts from all or specified provisions of the Code. #### 57 Loans for conservation of heritage items—exemption from Code (1) The Code does not apply to the provision of credit under section 106 of the Heritage Act 1977 (NSW). (2) The Code does not apply to the provision of credit under section 12 of the Heritage Act 1993 (SA), but only in respect of loans made from the State Heritage Fund to owners of land constituting places entered in the State Heritage Register established under that Act. (3) The Code does not apply to the provision of credit under section 140 of the Heritage Act 1995 (Vic). > Note: Subsection 6(13) of the Code provides that the regulations may exclude the provision of credit of any class from the Code. #### 58 ADIs—exemption from Code (1) The Code does not apply to the provision of credit by an ADI limited by the contract to a total period not exceeding 62 days. > Note: Subsection 6(13) of the Code provides that the regulations may exclude the provision of credit of any class from the Code. (2) However, subsection (1) does not apply in relation to the provision of credit by an ADI under a buy now pay later contract. #### 59 Estate administrators—exemption from certain provisions of Code (1) The Code, other than sections 76 to 81, does not apply to a public official or a public body authorised by any law or court to administer a person’s estate, to the extent that the public official or public body is providing credit to the person’s estate, whether or not the person is deceased. (2) In this regulation: > estate includes trust property. > public body includes a corporation owned or controlled by: (a) the Commonwealth; or (b) a State or Territory; or (c) an authority of the Commonwealth or a State or Territory. > Note: Section 203B of the Code provides, among other things, that the regulations may exempt a person or a class of persons from all or specified provisions of the Code. #### 60 Credit under Aged Care Act 2024—exemption from certain provisions of Code The Code, other than sections 72 to 74 and 76 to 81, does not apply to a registered provider (within the meaning of the Aged Care Act 2024) to the extent that the registered provider is providing credit that is made and regulated under that Act. > Note: Section 203B of the Code provides, among other things, that the regulations may exempt a person or a class of persons from all or specified provisions of the Code. #### 61 Firefighter’s Benefit Fund of WA Incorporated—exemption from certain provisions of Code The Code, other than Division 3 of Part 2, Division 3 of Part 4 and Divisions 1 and 2 of Part 5, does not apply to a contract to the extent that the contract provides for the provision of credit to a person by the Firefighter’s Benefit Fund of WA Incorporated (the fund) in the following circumstances: (a) the person is a member of the fund; (b) the application form by which the person applies for the credit states an annual percentage rate for the credit; (c) the contract: (i) fixes, for the whole term of the contract, an annual percentage rate that is the same as the rate stated in the application form; and (ii) does not provide for varying the rate. > Note: Section 203B of the Code provides, among other things, that the regulations may exempt a contract or a class of contracts from all or specified provisions of the Code. #### 62 Charge card contracts—exemption of certain contracts from Code (1) The Code does not apply to the provision of credit under a charge card contract made available by any of the following credit providers: (a) American Express Australia Limited ACN 108 952 085; (b) American Express International Inc. ARBN 000 618 208; (c) Diners Club Pty Limited ACN 004 343 051; (d) Motorcharge Limited ACN 008 962 132. > Note: Examples: > Note: 1 American Express Platinum Card. > Note: 2 Diners Club Personal Card. > Note: 3 Motorcharge Card. (2) In subsection (1): > charge card contract means a credit contract under which: (a) credit is ordinarily obtained by the use of a card; and (b) multiple advances of credit are contemplated; and (c) the provision of an advance of credit is limited to a total period of not more than 62 days; and (d) monthly or other periodic statements of account are provided to the debtor; and (e) liquidated damages or charges for late payment are payable by the debtor if the debtor does not repay an advance of credit mentioned in a monthly or other periodic statement of account within a stated period. > Note: Subsection 6(13) of the Code provides that the regulations may exclude the provision of credit of any class from the Code. #### 63 Credit providers providing credit to directors—exemption from certain provisions of Code (1) The Code, other than: (a) Part 1; and (b) Part 4; and (c) Division 3 of Part 5; and (d) Divisions 4 and 5 of Part 7; and (e) Parts 12, 13 and 14; does not apply to a credit provider, or a related body corporate of a credit provider, to the extent that the credit provider or related body corporate is providing credit to a director of the credit provider, other than a former director, whether or not the credit is provided to the director with another person. (2) However, for a credit provider who provides credit in the course of a business of providing credit to which the Code applies to directors and to others, this regulation applies only to the provision of credit on terms that are more favourable to the debtor than the terms on which the credit provider provides credit to which the Code applies to persons who are not directors of the employer. > Note: Section 203B of the Code provides, among other things, that the regulations may exempt a person or a class of persons from all or specified provisions of the Code. #### 64 Mortgages—exemptions from Code (1) The Code does not apply to the following mortgages: (a) a mortgage relating to perishable goods, livestock, primary produce or food stuffs; (b) a banker’s right to combine accounts; (c) a lien or charge arising by operation of any Act or law or by custom. (2) However, sections 16 and 17 of the Code (relating to disclosures) apply in respect of a mortgage mentioned in paragraph (1)(a). (3) Section 91 of the Code does not apply to any mortgage relating to goods that are lawfully in the possession of the credit provider. > Note: This regulation is made under subsection 7(3) of the Code. #### 65 Guarantees—exemption from Code The Code does not apply to any guarantee by the supplier under a tied loan contract or tied continuing credit contract. > Note: This regulation is made under subsection 8(3) of the Code. #### 65A Indigenous Business Australia—exemption from certain provisions of Code The Code, other than sections 72 to 81, does not apply to Indigenous Business Australia. > Note 1: Section 203B of the Code provides, among other things, that the regulations may exempt a person or a class of persons from all or specified provisions of the Code. > Note 2: Indigenous Business Australia is the former Aboriginal and Torres Strait Islander Commercial Development Corporation, renamed in accordance with subsection 145(1) of the Aboriginal and Torres Strait Islander Act 2005. #### 65C Residential investment property loans—exemption from Code The Code does not apply to the provision of credit if: (a) the credit is provided for either of the following purposes: (i) to purchase, renovate or improve residential property for investment purposes; or (ii) predominantly to refinance credit that has been provided wholly or predominantly to purchase, renovate or improve residential property for investment purposes; and (b) the credit is not provided for the purpose of investment in a single residence; and (c) the total amount if the credit provided, or to be provided, is more than $5 000 000. > Note: Subsection 6(13) of the Code provides that the regulations may exclude the provision of credit of any class from the Code. #### 65D Help to Buy arrangements—exemption from Code The Code does not apply to the provision of credit by Housing Australia under a Help to Buy arrangement (within the meaning of the Help to Buy Act 2024). > Note: Subsection 6(13) of the Code provides that the regulations may exclude the provision of credit of any class from the Code. #### 66 Deemed mortgages for goods lease with option to purchase For paragraph 9(3)(f) of the Code, the terms and conditions of a mortgage are set out in Form 4. > Note: Section 9 of the Code treats a goods lease with an option to purchase to be a sale of goods by instalments for the purposes of the Code. > Note: If the lease is a credit contract because of subsection 5(1) of the Code, a mortgage containing the terms and conditions set out in the regulations is taken by paragraph 9(3)(f) of the Code to have been entered into between the person to whom the goods are hired and the supplier as security for payments to the supplier by the hirer. #### 67 Prescribed person in relation to a declaration For subsection 13(3) of the Code, the prescribed person is: (a) if the person who obtained the declaration from the debtor was the credit provider—a person associated with the credit provider; or (b) if the person who obtained the declaration from the debtor was a person associated with the credit provider—the person associated with the credit provider; or (c) if the person who obtained the declaration from the debtor was not the credit provider or a person associated with the credit provider—any of the following: (i) a person who obtained the declaration from the debtor; (ii) a person who referred the debtor to the person who obtained the declaration (whether the referral was for the purpose of obtaining the declaration or otherwise); (iii) a person who suggested that the debtor apply for the provision of credit, and the suggestion was made during the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person; (iv) a person who assisted the debtor to apply for the provision of credit, and the assistance was given during the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person. #### 68 Declaration of purposes for which credit provided (1) For subsection 13(5) of the Code, the form of the declaration is: ‘I/We declare that the credit to be provided to me/us by the credit provider is to be applied wholly or predominantly for: - business purposes; or - investment purposes other than investment in residential property.’ (2) The declaration must contain the following warning immediately below the words of the declaration mentioned in subregulation (1) or, if the declaration is to be made by electronic communication, prominently displayed when (but not after) the person signs: | IMPORTANTYou should only sign this declaration if this loan is wholly or predominantly for:business purposes; orinvestment purposes other than investment in residential property.By signing this declaration you may lose your protection under the National Credit Code. | | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | (3) The declaration must contain: (a) the signature of each person making the declaration; and (b) either: (i) the date on which the declaration is signed; or (ii) the date on which it is received by the credit provider. > Note: The Code applies only to credit provided or intended to be provided for: (a) personal, domestic or household purposes; or (b) the purchase, renovation or improvement of residential property used for investment purposes; or (c) the refinancing of credit that has been provided wholly or predominantly for the purchase, renovation or improvement of residential property used for investment purposes. > Note: Subsection 13(2) of the Code provides that credit is presumed not to be provided for Code purposes if the debtor declares, before entering into the credit contract, that the credit is to be applied wholly or predominantly for business or investment purposes (or for both purposes), other than investment in residential property. > Note: The declaration is not effective unless it is substantially in the form required by the regulations. #### 69 First default in payment notices—exemption for credit providers (1) Subsection 87(2) of the Code does not apply to a credit provider if the default mentioned in subsection 87(1) of the Code is rectified before the credit provider is required to give the first default in payment notice under subsection 87(2). (2) Disregard a default in relation to which, in reliance on subregulation (1), no first default in payment notice is given. > Note: Section 203B of the Code provides, among other things, that the regulations may exempt a person or a class of persons from all or specified provisions of the Code. #### 69C Exemption—requirement to disclose information about the AFCA scheme (1) This regulation applies to a person to whom the following apply: (a) the person is: (i) an unlicensed carried over instrument lender; or (ii) exempt under section 109 or 110 of the Act from the requirement to hold a licence; (b) the person is not a member of the AFCA scheme; (c) the person would, but for this regulation, be required to comply with a requirement, under one or more of the following provisions of the Code, to disclose information about rights under, or access to, the AFCA scheme: (i) subparagraph 72(4)(b)(iv); (ii) subsection 85(3); (iii) subsection 87(3); (iv) paragraph 88(3)(g); (v) subparagraph 94(2)(b)(ii); (vi) paragraph 102(1)(c); (vii) subsection 136(2); (viii) subsection 149(2); (ix) subsection 175(1); (x) subparagraph 177B(4)(b)(iv); (xi) subsection 179C(2); (xii) subparagraph 179D(2)(f)(ii); (xiii) subparagraph 179H(2)(b)(ii). (2) The person is exempt from the relevant provision or provisions. #### 69D Exemption—requirement to give notice of direct debit default (1) Subsection 179C(2) of the Code does not apply to a lessor if the default mentioned in subsection 179C(1) is rectified before the lessor is required to give the direct debit default notice under subsection 179C(2). (2) Disregard a default in relation to which, in reliance on subregulation (1), no direct debit default notice is given. > Note: Section 203B of the Code provides, among other things, that the regulations may exempt a person or a class of persons from all or specified provisions of the Code. ## Part 7‑1A—Extended application of the Code: buy now pay later and low cost credit #### 69F Meaning of buy now pay later arrangement and buy now pay later contract—arrangements or series of arrangements that are not buy now pay later arrangements (1) For the purposes of subsection 13D(2) of the Code, this regulation prescribes arrangements or a series of arrangements that are not a buy now pay later arrangement. Medical financing at no cost to the consumer (2) An arrangement or a series of arrangements is not a buy now pay later arrangement if all of the following apply: (a) the merchant is a related body corporate of the BNPL provider; (b) the merchant supplies a service to the consumer; (c) the service is a service for which medicare benefit is payable under Part II of the Health Insurance Act 1973; (d) the BNPL provider provides credit to the consumer at no cost to the consumer. #### 69G Meaning of low cost credit contract—fees or charges (1) For the purposes of paragraph 13E(1)(d) of the Code, this regulation prescribes requirements relating to fees or charges that are, or may be, payable under a contract (the relevant contract) entered into, or to be entered into, between a credit provider and a debtor. (2) The fees or charges that are, or may be, payable under the relevant contract satisfy the requirements in this regulation if those fees or charges could not result in a breach of a cap applicable under this regulation to the credit provider and the debtor in a fee period. > Note: For the definition of fee period, see subregulation (4). (3) A breach of a cap applicable to the credit provider and the debtor in a fee period occurs if the sum of all the fees or charges of a kind specified in column 1 of an item of the following table that become payable in the fee period under: (a) the relevant contract; and (b) any other low cost credit contract between the credit provider and the debtor; exceeds the cap determined for that kind of fees or charges for the fee period under column 2 of that table item. | Item | Column 1Kind of fees or charges | Column 2Cap | | ---- | -------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | 1 | Fees or charges other than default fees or charges | (a) for the first fee period for the credit provider and the debtor—$200; or(b) otherwise—$125. | | 2 | Default fees or charges | (a) unless paragraph (b) applies—$120; or(b) if only default fees or charges are, or may be, payable under the relevant contract and each other low cost credit contract between the credit provider and the debtor:(i) for the first fee period for the credit provider and the debtor—$320; or(ii) otherwise—$245. | Definitions (4) In this regulation: > fee period, for a credit provider and a debtor, means any of the following: (a) the period of 12 months beginning on the later of: (i) the earliest day on which the debtor ever became a debtor under a low cost credit contract with the credit provider; and (ii) the day on which the delayed commencement time (within the meaning of item 8 of Schedule 2 to the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024) occurred; (b) each subsequent 12 month period. ## Part 7‑2—Credit contracts #### 70 Statement about debtor’s statutory rights and obligations (1) For paragraphs 16(1)(b) and 16(1A)(b) of the Code, an information statement must: (a) be in writing; and (b) be in accordance with Form 5. (2) The information statement may be in the form of a separate document or a part of the credit contract document. > Note: Paragraphs 16(1)(b) and 16(1A)(b) of the Code require a credit provider to give a prospective debtor an information statement in the form required by the regulations of the debtor’s statutory rights and statutory obligations. > Note: The statement must be given before the contract is entered into or before the debtor makes an offer to enter into the contract, whichever first occurs. > Note: In accordance with subregulation 6(5), the information need not contain any matter set out in Form 5 if it is not relevant to the credit contract concerned. For example, information about mortgages is not required for an unsecured loan. #### 71 Comparison rate (1) This regulation applies if: (a) a credit provider, before entering into a credit contract, informs the debtor of the comparison rate in accordance with subsection 16(3) of the Code; or (b) a person publishes, or causes to be published, an advertisement that states or implies that credit is available and includes in the advertisement the comparison rate in accordance with Part 10 of the Code. (2) The comparison rate must be calculated as a nominal rate per annum, together with the compounding frequency, in accordance with this regulation. (3) The comparison rate is calculated using the formula:  where: > n is the number of repayments per annum to be made under the credit contract (annualised if the term of the contract is less than 12 months), except that: (a) if repayments are to be made weekly, n is 52.18; and (b) if repayments are to be made fortnightly, n is 26.09; and (c) if the contract does not provide for a constant interval between repayments, n is to be derived from the interval selected for the purposes of the definition of j. > r is the solution of:  where: > Aj is the amount of credit to be provided under the contract at time j (the value of j for the provision of the first amount of credit is taken to be zero). > Cj is the fee or charge (if any) payable by the debtor at time j in addition to the repayments Rj, being a credit fee or charge (other than a government fee, charge or duty) that is ascertainable when the comparison rate is disclosed (whether or not the credit fee or charge is payable if the credit is not provided). > j is the time, measured as a multiple (not necessarily integral) of the interval between contractual repayments that will have elapsed since the first amount of credit is provided under the credit contract, except that if the contract does not provide for a constant interval between repayments an interval of any kind is to be selected by the credit provider as the unit of time. > Rj is the repayment to be made at time j. > t is the time, measured as a multiple of the interval between contractual repayments (or other interval so selected) that will elapse between the time when the first amount of credit is provided and the time when the last repayment is to be made under the contract. (4) The comparison rate must be correct to at least the nearest one hundredth of 1% per annum. (5) In the application of the above formulae, reasonable approximations may be made if it would be impractical or unreasonably onerous to make a precise calculation. > Note: Example: If repayments are to be made on a fixed day each month, it may be assumed that repayments will be made on that day each month even though the credit contract provides for payment on the preceding or succeeding business day when the due date is not a business day. (6) The tolerances and assumptions under sections 180 to 182 of the Code apply to the calculation of the comparison rate. (7) The comparison rate must be accompanied by a statement of the amount of credit on which it is based and the term for which credit is provided. (8) In the case of a comparison rate under subsection 16(3) of the Code: (a) the amount of credit is to be the amount (or the maximum amount) required by the debtor; and (b) the term for which credit is provided is to be the term (or the maximum term) required by the debtor; and (c) the amount of credit, in the case of a continuing credit contract, is not to exceed the credit limit required by the debtor. (9) If the debtor does not make a requirement in relation to a matter mentioned in paragraph (8)(a), (b) or (c), the credit provider may determine the matter. (10) In the case of a comparison rate under Part 10 of the Code: (a) the amount of credit and term are to be typical of the type of credit contract offered in the advertisement; and (b) a number of comparison rates may be included in the advertisement for different credit contracts if the amount of credit and term applicable to each of the rates are clearly stated. (11) At the time that the debtor is informed of the comparison rate under subsection 16(3) of the Code, the debtor must be given the following warning by the credit provider in writing: ‘WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.’ (12) An advertisement that contains a comparison rate in accordance with Part 10 of the Code must include a warning that the comparison rate is accurate only for the example given. (13) A warning under this regulation must be given immediately after the comparison rate is given. > Note 1: Subsection 16(3) of the Code provides that the credit provider may inform the debtor of the comparison rate before entering into the contract. > Note 2: Part 10 of the Code provides that a person who publishes an advertisement about the availability of credit may include in the advertisement the comparison rate. If the credit provider or person does so, the comparison rate must be calculated as prescribed by the regulations and be accompanied by the warnings set out in the regulations. #### 72 Pre‑contractual statement (1) For subsection 16(4) of the Code, the following financial information (relevant financial information) mentioned in section 17 of the Code, which is to be contained in the precontractual statement, is prescribed: (a) for subsection 17(3) (Amount of credit): (i) the amount of credit agreed to be provided (if ascertainable); or (ii) if the amount is not ascertainable—the maximum amount of credit agreed to be provided, or the credit limit under the contract (if any); (b) for subsection 17(4) (Annual percentage rate or rates)—the information mentioned in the subsection, other than the information mentioned in subparagraph 17(4)(c)(iii); (c) for subsection 17(5) (Calculation of interest charges)—the maximum duration of any interest free period under the credit contract; (d) for subsection 17(6) (Total amount of interest charges payable)—the information mentioned in the subsection; (e) for subsection 17(7) (Repayments)—the information mentioned in the subsection; (f) for subsection 17(8) (Credit fees and charges)—the information mentioned in paragraphs 17(8)(a) and (b), but only in respect of: (i) retained credit fees and charges (being credit fees and charges retained by the credit provider and not passed on to or retained in reimbursement of an amount paid to a third party); and (ii) lenders mortgage insurance. (2) The relevant financial information is to be set out: (a) separately from the remainder of the information under section 17 of the Code that is to be set out in the precontractual statement; and (b) in tabular form (the financial table), in either portrait or landscape format. (3) Additional information may be included in the financial table, but only in the following circumstances: (a) any information mentioned in subsection 17(3), (4), (5) or (8) of the Code that is not relevant financial information may be included with the relevant financial information; (b) any other information mentioned in subsection 17(2) or subsections 17(9) to (16) of the Code may be included after the relevant financial information and any information included under paragraph (a). (4) If the relevant financial information relates to more than one type of credit facility, the information may be set out in a single financial table or in separate financial tables. (5) The financial table is to be set out at the beginning of the precontractual statement, after any formal cover page or pages that have no substantive content. (6) However: (a) if the precontractual statement is not a separate document, the financial table is to be set out at the beginning of the proposed contract document; and (b) the financial table may be preceded by information necessary to identify the loan. (7) If the precontractual statement consists of more than one document, the financial table need not be repeated. (8) If any of the relevant financial information can change under the credit contract because of a unilateral change by the credit provider: (a) a clear statement must be made in the financial table that it is subject to change and that the change can be made without the debtor’s consent; and (b) a single statement may be made for 2 or more items of information that are subject to change. (9) An expression may be used for the purposes of the relevant financial information if the expression is defined in the precontractual statement. (10) The relevant date of disclosure of the information in the financial table may be set out in the financial table. (11) This regulation does not prevent a repetition of the relevant financial information in the financial table in any other form in connection with the remainder of the information under section 17 of the Code that is to be set out in the precontractual statement. > Note: Paragraph 16(1)(a) of the Code requires a credit provider to give a prospective debtor a precontractual statement setting out matters required by section 17 of the Code to be included in the credit contract document. The precontractual statement must be given before the credit contract is entered into or before the debtor makes an offer to enter into the contract, whichever first occurs. > Note: Under subsection 16(4) of the Code, the regulations may specify the financial information that is to be contained in the precontractual statement, and prescribe the form in which the information must appear. #### 72A Precontractual disclosure—requirements for giving documents other than personally (1) This regulation applies in relation to a credit provider giving a precontractual document to a debtor for the purposes of section 16 of the Code unless the credit provider, or an agent of the credit provider, delivers the document physically: (a) to the debtor personally; or (b) to a person acting on the debtor’s behalf. > Note: Example: This regulation applies in relation to the credit provider: (a) emailing or posting a precontractual document to a debtor; or (b) giving a precontractual document to a debtor in the way specified by regulation 72C (electronic document retrieval system). (2) For the purposes of paragraph (1)(b), a person is not acting on the debtor’s behalf if the person is engaging in credit activities. (3) For the purposes of paragraph 16(9)(c) of the Code, the following requirement is specified: the credit provider must be satisfied on reasonable grounds that the debtor has received the precontractual document. (4) For the purposes of subregulation (3) of this regulation: (a) the credit provider is taken not to be satisfied that the debtor has received the precontractual document if the debtor has told the credit provider that the debtor has not received the document (unless the debtor has subsequently told the credit provider that the debtor has received the document); and (b) subject to paragraph (a), reasonable grounds on which to be satisfied that the debtor has received the document include the following: (i) the document was properly addressed to the debtor and sent to that address (including an electronic address); (ii) the document was given to the debtor in the way specified by regulation 72C, and the relevant notice mentioned in paragraph 72C(1)(a) was properly addressed to the debtor and sent to that address (including an electronic address). #### 72B Precontractual disclosure—requirements for giving documents by means involving electronic communication (1) For the purposes of paragraph 16(9)(b) of the Code, a credit provider must not give a precontractual document to a debtor for the purposes of section 16 of the Code by a particular means involving electronic communication unless: (a) the debtor, after being informed of the matters set out in subregulation (2), consents to the credit provider giving precontractual documents to the debtor by that means; and (b) the precontractual document is given in such a manner that it is reasonable to expect that the debtor will be able to save the document to an electronic file and print it. (2) For the purposes of paragraph (1)(a), the matters are that, if the debtor consents to the credit provider giving precontractual documents to the debtor by that particular means: (a) the credit provider might not give precontractual documents to the debtor in paper form in the future; and (b) the debtor should regularly check for electronic communications from the credit provider about precontractual documents; and (c) such consent may be withdrawn at any time. > Note: Regulation 72A provides additional requirements for giving precontractual documents to debtors by means of electronic communication. #### 72C Precontractual disclosure—making documents available for retrieval on an electronic document retrieval system (1) For the purposes of subsection 16(8) of the Code, a credit provider may give a precontractual document to a debtor for the purposes of section 16 of the Code by: (a) notifying the debtor, in accordance with subregulation (3), that the precontractual document is available for retrieval by the debtor on an electronic document retrieval system; and (b) making the precontractual document available for retrieval by the debtor, in accordance with the notification, for a reasonable period after the credit provider gives the notification to the debtor. > Note: This regulation does not limit the ways in which a credit provider may give a precontractual document to a debtor for the purposes of section 16 of the Code. (2) The credit provider is taken to give the precontractual document to the debtor at the first time: (a) that occurs at or after the time the credit provider gives the debtor the notification mentioned in paragraph (1)(a); and (b) at which the precontractual document is available for retrieval by the debtor as mentioned in paragraph (1)(b). (3) For the purposes of paragraph (1)(a), the notice must: (a) state that the precontractual document is a precontractual statement, a document forming part of a precontractual statement, a variation of a precontractual statement or an information statement (whichever is applicable); and (b) include any information relating to the precontractual document that the debtor needs in order to be able to retrieve the document. > Note: Example: Paragraph (b)—the document’s electronic address or any password protecting the document. (4) The precontractual document is available for retrieval by a debtor on an electronic document retrieval system if the document is available on an information system for retrieval by electronic communication by the debtor. > Note: Regulations 72A and 72B provide additional requirements for giving precontractual documents to debtors by means of electronic communication. #### 73 Additional disclosures about insurance financed by contract For paragraph 17(15)(c) of the Code, the term of each credit‑related insurance contract, if ascertainable, is prescribed. > Note: Subsection 17(15) of the Code sets out the disclosures to be made about credit‑related insurance contracts that are to be financed under the credit contract. Paragraph 17(15)(c) enables the regulations to prescribe additional particulars about the insurance that is to be disclosed. #### 74 Additional disclosures about credit contracts to be signed by debtor (1) For subsection 17(16) of the Code, the information and warnings set out in Form 6 or 7, as relevant, are prescribed, but only if the credit contract document is to be signed by the debtor. (2) Form 6 is the relevant form if the document signed by the debtor constitutes an offer. (3) Form 7 is the relevant form if the document signed by the debtor constitutes the acceptance of an offer by the credit provider. (4) The information and warnings mentioned in subsection (1): (a) are to be in the relevant form (including in the form of boxes); and (b) must: (i) be set out immediately above, and on the same page as, each place where the debtor (or at least one of the debtors) is to sign the contract document; or (ii) if a contract is made by electronic communication—be prominently displayed when, but not after, the debtor (or if 2 or more debtors, each debtor) signs. > Note 1: Section 17 of the Code sets out the matters to be included in the credit contract document. Subsection 17(16) requires the contract document to contain any additional information or warnings required by the regulations. > Note 2: Section 18 of the Code requires a contract document to conform to the requirements of the regulations as to its form and the way it is expressed. #### 74A Reverse mortgages—disclosure about credit contract not including tenancy protection provision For the purposes of subsections 18B(2) and (4) of the Code, Form 7A is prescribed. #### 75 Deduction of amount for interest charges Subsection 25(1) of the Code does not apply to the deduction of an amount for the first payment of interest charges under a credit contract, but only if the deduction relates to interest charges for a period that is less than the normal period for which interest charges are to be periodically debited to the debtor’s account. > Note 1: Subsection 25(1) of the Code provides, among other things, that a credit provider must not deduct from a payment to, or in accordance with the instructions of, the debtor an amount for interest charges under the credit contract. > Note 2: Subsection 25(3) of the Code authorises the making of regulations that exempt from that prohibition the deduction of an amount for the first payment of interest charges. #### 76 Calculation of unpaid daily balances (1) This regulation applies to the calculation of average unpaid daily balances if interest charges under a credit contract are determined under subsection 28(2) of the Code for a month, a quarter or a half‑year by applying the relevant fraction of the annual percentage rate. (2) The actual unpaid daily balances for each day in the month, quarter or half‑year concerned are to be added together and divided by the total number of days in the whole of that month, quarter or half‑year. (3) If the annual percentage rate applies to part (but not the whole) of the month, quarter or half‑year, the calculation of the average unpaid daily balances for that part is to be made by adding together the actual unpaid daily balances for each day in that part and dividing the sum obtained by the total number of days in that month, quarter or half‑year. (4) If the last day or days of the month, quarter or half‑year fall on a non‑business day or days, the average unpaid daily balances for the month, quarter or half‑year may be calculated without reference to the unpaid daily balances for the non‑business day or days. (5) In the event mentioned in subregulation (4), the unpaid daily balances for the non‑business day or days must be included in the next month, quarter or half‑year for the purposes of calculating the average unpaid daily balances for that next month, quarter or half‑year. > Note: Subsection 28(1) of the Code limits the maximum amount of an interest charge that may be imposed or provided under a credit contract generally to an amount determined by applying the daily percentage rate to the unpaid daily balances (as defined in section 27 of the Code). > Note: However, subsection 28(2) of the Code allows an interest charge for a month, a quarter or half‑year to be determined by applying the annual percentage rate or rates, divided by: (a) 12 (for a month); or (b) by 4 (for a quarter); or (c) by 2 (for a half‑year); > Note: to the relevant average unpaid daily balances for the period. The regulations may provide for the calculation of unpaid daily balances in these circumstances. #### 77 Early debit or payment of interest charges Subsection 29(1) of the Code does not apply to the first payment of interest charges under a credit contract, but only if it relates to interest charges for a period that is less than the normal period for which interest charges are to be periodically debited to the debtor’s account. > Note 1: Subsection 29(1) of the Code provides that a credit provider must not require payment of or debit an interest charge at any time before the end of a day to which the interest charge applies. > Note 2: Subsection 29(3) of the Code authorises the making of regulations that exempt from that prohibition the first payment of interest charges under the credit contract. #### 78 Interest charges in relation to residential investment property (1) This regulation applies to a provision of credit that is provided or intended to be provided wholly or predominantly: (a) to purchase, renovate or improve residential property for investment purposes; or (b) subject to subregulation (3), to refinance credit that has been provided wholly or predominantly to purchase, renovate or improve residential property for investment purposes. (2) For section 30A of the Code, Division 3 of Part 2 of the Code applies to the provision of credit as if section 29 of the Code were omitted. > Note: Section 30A of the Code provides, among other things, that the regulations may provide that Division 3 of Part 2 of the Code applies in relation to a provision of credit covered by subparagraph 5(1)(b)(ii) or (iii) of the Code as if specified provisions were omitted as specified in the regulations. (3) For paragraph (1)(b), this regulation does not apply if, at the time the credit contract is entered into, the predominant use of the residential property is for personal, domestic or household purposes. #### 79 When statement of account not required For paragraph 33(3)(b) of the Code, the level is $10. > Note: Section 33 of the Code requires the credit provider to give the debtor periodic statements of account. Subsection 33(3) sets out the circumstances in which a statement is not required to be given. > Note: Paragraph 33(3)(b) provides that a statement is not required if no amount has been debited or credited to the debtor’s account during the statement period and the amount outstanding on the debtor’s account is zero or below a level fixed by the regulations. ## Part 7‑2A—Prohibited credit fees and charges #### 79A Termination fees for certain credit contracts (1) For section 31 of the Code, a credit fee or charge is prohibited if: (a) it is provided for in a credit contract entered into on or after 1 July 2011; and (b) it is to be paid on or in relation to the termination of the credit contract, whether the liability to make the payment is incurred at that time or at an earlier time; and (c) any of the amount of credit provided under the credit contract is secured over residential property. (2) However, subregulation (1) does not apply to: (a) a credit fee or charge that is: (i) a break fee; or (ii) a discharge fee; or (b) a credit fee or charge that is incurred before the termination of a credit contract that is terminated before any credit has been provided under the credit contract. (3) In this regulation: > break fee means a credit fee or charge that relates: (a) only to the early repayment of an amount provided under a credit contract for a fixed rate loan; and (b) only to the portion of the loan that is fixed; and (c) to the part of the credit provider’s loss, arising from the early repayment, that is a result of differences in interest rates. > discharge fee means a credit fee or charge that only reimburses the credit provider for the reasonable administrative cost of terminating the credit contract. > fixed rate loan means a credit contract under which the annual percentage rate is fixed, for an agreed term, for the whole or a part of the amount due under the credit contract. (4) For the definition of discharge fee, a cost is a reasonable administrative cost only if it does not exceed a reasonable estimate of the average reasonable administrative cost to the credit provider of terminating that class of credit contract. #### 79AE Small amount credit contracts (fees and charges)—prescribed persons For subsection 31B(1) of the Code, a person specified in the following table is a prescribed person. ```html <table cellspacing="0" cellpadding="0" style="width:97.98%; border-collapse:collapse"><thead><tr><td colspan="2" style="border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Prescribed persons</span></p></td></tr><tr><td style="width:9.02%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Item</span></p></td><td style="width:90.98%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Person</span></p></td></tr></thead><tbody><tr><td style="width:9.02%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:90.98%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>A person who introduces a debtor to a credit provider (whether or not the person is associated with the credit provider).</span></p></td></tr><tr><td style="width:9.02%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:90.98%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>A person who has been introduced to a debtor by a credit provider to provide a service in relation to a small amount credit contract (whether or not the person is associated with the credit provider).</span></p></td></tr></tbody></table> ``` > Note: Section 31B of the Code relates to fees and charges in relation to: (a) a small amount credit contract; or (b) the provision of an amount of credit under a small amount credit contract; or (c) a thing that is connected with a small amount credit contract or the provision of an amount of credit under such a contract. > Note: Section 31B of the Code applies to a credit provider or a person prescribed by the regulations. #### 79AB Credit provider or prescribed person must not require or accept payment of fee or charge in relation to small amount credit contract etc For subsection 31B(1) of the Code, a person who has been introduced to a debtor by a credit provider to provide a service in relation to a small amount credit contract is a prescribed person (whether or not the person is associated with the credit provider). > Note: Section 31B of the Code applies to a credit provider or a person prescribed by the regulations. #### 79AC Prohibition relating to annual cost rate of credit contracts—later increases of annual percentage rate etc (1) For subparagraph 32AA(1)(c)(ii) of the Code, an amount is a prescribed amount if it: (a) is referred to in subsection 32B(3) of the Code; and (b) is payable in relation to a medium amount credit contract. (2) For subparagraph 32AA(1)(c)(ii) of the Code, an amount is a prescribed amount if: (a) it is referred to in subsection 32B(3) of the Code; and (b) it is not payable in relation to a medium amount credit contract; and (c) the credit provider has a practice of requesting debtors to increase the amount of repayments above the amount the debtor is required to pay under the credit contract; and (d) the debtor becomes liable to pay the fee as a result of making increased repayments because of a request by the credit provider. > Note: Subparagraph 32AA(1)(c)(ii) of the Code refers to an amount referred to in subsection 32B(3) of the Code that is prescribed by the regulations. Section 32AA of the Code applies if the prescribed amount increases after a credit contract is entered into and other circumstances occur. #### 79B Minimum Repayment Warning (1) For subsection 34(12) of the Code, a statement of account for a credit card contract must contain the warning and details mentioned in subregulation (2). (1A) However, the warning and details are not required if: (a) the outstanding balance shown on the statement is $50 or less; or (b) there is no outstanding balance; or (c) a payment arrangement is in effect which replaces the normal monthly minimum payments. > Note: If there is an outstanding balance of $50 or less, the licensee may choose to provide the warning and details. In that case, subregulation (3) may affect the content of the warning. (1B) If the licensee provides the warning and details, they must be shown on the front page of the statement of account. (2) The warning and details must be in the following form: Minimum Repayment Warning: If you make only the minimum payment each month, you will pay more interest and it will take you longer to pay off your balance. For example: | If you make no additional charges using this card and each month you pay ... | You will pay off the Closing Balance shown on this statement in about ... | And you will end up paying an estimated total of interest charges of ... | | ---------------------------------------------------------------------------- | ------------------------------------------------------------------------- | ------------------------------------------------------------------------ | | Only the minimum payment | [period] | [total interest 1] | | [repayment 2] | 2 years | [total interest 2], a saving of [savings 2] | Having trouble making repayments? If you are having difficulty making credit card repayments, please contact us on \[phone number\]. We may be able to assist you. (3) If the time to pay off the closing balance, making only the minimum payment each month, is 2 years or less, the item for \[repayment 2\] in the table in the Minimum Payment Warning is not required. > Note: If the time to pay off the closing balance, making only the minimum payment each month, is 2 years or less, the licensee may choose to provide the item for \[repayment 2\] in the warning. (4) \[Period\] must be calculated on the assumption that: (a) the borrower pays the amount of the minimum payment mentioned in the statement of account each month; and (b) no other purchases or advances are added to the outstanding balance. (5) If more than one interest rate applies, the licensee may elect to use the purchase rate as the applicable rate to be applied to the whole of the outstanding balance. > Note: The tolerances and assumptions in section 180 of the Code will apply to the calculation. (7) In this regulation: > \[date\] means the repayment due date. > \[period\] means the time, in years and months, needed to repay the closing balance, making the minimum repayment each month until the balance is repaid. > purchase rate means the rate which applies to the purchase of goods and services under the credit card contract. > \[repayment 2\] means the monthly repayment required to pay off the closing balance in 2 years. > \[savings 2\] is the difference between \[total interest 1\] and \[total interest 2\]. > \[total interest 1\] means the total interest payable if the customer is making the minimum repayment each month until the balance is repaid. > \[total interest 2\] means the total interest that the consumer would be charged if the consumer made payments of \[repayment 2\] to pay off the closing balance in 2 years. ## Part 7‑2B—Additional rules in relation to small amount credit contracts #### 79C Default in payment by direct debit under small amount credit contract (1) For section 39C of the Code, the credit provider must refrain from seeking a repayment due under a small amount credit contract by relying on a direct debit request if: (a) the credit provider has twice sought to obtain the repayment using the direct debit request; and (b) the credit provider: (i) has not told the debtor that the direct debit requests have been unsuccessful; or (ii) has not made reasonable attempts to contact the debtor. (2) If the credit provider receives the repayment to which subregulation (1) relates: (a) subregulation (1) ceases to apply; and (b) the credit provider may seek repayments due under the small amount credit contract by relying on a direct debit request. ## Part 7‑3—Related mortgages and guarantees #### 80 Mortgage arising from certain home ownership schemes—exemption from subsection 50(1) of the Code (1) This regulation applies to: (a) the home ownership scheme operated by the Mt Newman Joint Venturers, being: (i) BHP Billiton Minerals Pty Ltd ACN 008 694 782; and (ii) Mitsui‑Itochu Iron Pty Ltd ACN 088 702 761; and (iii) CI Minerals Australia Pty Ltd ACN 009 256 259; and (b) the home ownership scheme operated by the Mount Goldsworthy Mining Associates Joint Venturers, being: (i) BHP Billiton Minerals Pty Ltd ACN 008 694 782; and (ii) Mistsui Iron Ore Corporation Pty Ltd ACN 050 157 456; and (iii) CI Minerals Australia Pty Ltd ACN 009 256 259; that assist employees, whether alone or jointly with one or more other persons, to purchase land owned respectively by the Mt Newman Joint Venturers and the Mount Goldsworthy Mining Associates Joint Venturers. (2) Subsection 50(1) of the Code does not apply to any mortgage created over an interest that is acquired by an employee under a contract for the purchase of land entered into by the employee, whether alone or jointly with one or more other persons, under a home ownership scheme to which this regulation applies. (3) In this regulation: > employee means: (a) if BHP Billiton Iron Ore Pty Ltd ACN 008 700 981 is the manager of the Mt Newman Joint Venture or the Mount Goldsworthy Mining Associates Joint Venture: (i) an employee of that corporation; or (ii) an employee of a corporation that is a related body corporate in relation to BHP Billiton Iron Ore Pty Ltd; or (b) if BHP Billiton Iron Ore Pty Ltd ceases to manage the Mt Newman Joint Venture or the Mount Goldsworthy Mining Associates Joint Venture—an employee of the person for the time being exercising the functions of the manager of the Mt Newman Joint Venture or of the Mount Goldsworthy Mining Associates Joint Venture. > Note: Section 50 of the Code provides that a mortgage can not be created over employees’ remuneration or employment benefits or benefits under a superannuation scheme unless the regulations permit it to do so. #### 81 Form of guarantees (1) For section 55 of the Code, a guarantee must contain the warning set out in Form 8. (2) The warning must comply with the following requirements: (a) it must be in the form of a box as indicated in Form 8; (b) it must be set out immediately above, and on the same page as, the place where the guarantor (or at least 1 of the guarantors) is to sign the guarantee document; (c) if the guarantors are to sign the guarantee document on separate pages, it must be set out in that way on each page. > Note: Section 55 of the Code requires a guarantee to be in writing signed by the guarantor. Subsection 55(3) provides that the regulations may make provision for or with respect to the content of guarantees and the way they are expressed. #### 82 Explanation about guarantor’s rights and obligations (1) For paragraph 56(1)(b) of the Code, the document explaining the rights and obligations of a guarantor must be in accordance with Form 9. (2) The document may be a separate document or a part of the guarantee document. > Note: Paragraph 56(1)(b) of the Code requires a credit provider to give a prospective guarantor an explanation in the form required by the regulations of the guarantor’s rights and obligations. The explanation must be given before the obligations under the relevant credit contract are secured by the guarantee. ## Part 7‑4—Changes to obligations under credit contracts, mortgages and guarantees #### 83 Information about increases in the amount of credit (1) For subsection 71(3) of the Code, as much of the following information as is ascertainable is prescribed in respect of a credit contract (other than a continuing credit contract): (a) the date of the change in the contract; (b) the unpaid daily balance at the date of the notice; (c) the amount by which the amount of credit will be increased in accordance with the agreement; (d) the persons, bodies or agents (including the credit provider) to whom the amount mentioned in paragraph (c) is to be paid and the amounts payable to them; (e) the total of the amounts mentioned in paragraphs (b) and (c); (f) details of any change to the annual percentage rate; (g) details of any credit fees or charges that will be payable after the change in the contract; (h) current repayment details, being: (i) the number of repayments yet to be made; and (ii) the amount of each of those repayments; and (iii) the total amount of those repayments yet to be paid; (i) the repayment details once the agreement is made, being: (i) the number of repayments yet to be made once the agreement is made; and (ii) the amount of each of those repayments; and (iii) the total amount of those repayments; and (iv) details of any changes in the times or frequency of repayment; (j) if commission is to be paid by or to the credit provider for the introduction of credit business or business financed by the increased amount of credit under the contract—information of the kind mentioned in subsection 17(14) of the Code; (k) the proposed increase in the term of the contract; (l) the proposed new expiry date for the contract. > Note 1: Subsection 71(1) of the Code requires a credit provider to give notice to the other party of a change to a credit contract, mortgage or guarantee that has been agreed to by the credit provider and the other party. The notice must be given within 30 days after the date of the agreement. > Note 2: Subsection 71(3) of the Code provides that, if the parties propose to increase the amount of credit by agreement, the credit provider must also give to the debtor, before the agreement is made, a written notice containing the information required by the regulations. (2) Despite subregulation (1), the matter in paragraphs (1)(h) and (i) relating to the total amount of repayments need only be included in the written notice given under subsection 71(3) of the Code if the contract concerned would, on the assumptions under sections 180 and 182 of the Code, be paid out within 7 years of the date on which credit is first provided under the contract. ## Part 7‑5—Ending and enforcing credit contracts, mortgages and guarantees #### 84 Information after surrender of goods For subsection 85(3) of the Code, the information required to be contained in a notice must include the information set out in Form 10. > Note: Section 85 of the Code enables a debtor of goods sold by instalments or mortgagor to surrender the goods. Subsection 85(3) requires a credit provider to give a debtor or mortgagor a written notice containing the estimated value of the goods and any other information required by the regulations. #### 84A Market value of reverse mortgaged property (1) This regulation is made for subsection 86A(2) of the Code. (2) The market value of a reverse mortgaged property is: (a) if the property has not been sold—the property’s market value, as determined by an accredited valuer within 3 months before the credit provider receives an amount from the debtor to discharge the reverse mortgage; or (b) if the property has been sold—the property’s sale price. (3) However, if the market value under paragraph (2)(b) is reduced because: (a) the debtor, or a person who occupied the property with the debtor’s consent, deliberately damaged the property; or (b) the sale was not conducted in good faith; or (c) the sale was not conducted on fair and reasonable terms; the market value of the property is the market value at the time of the sale, as determined by an accredited valuer. (4) In this regulation: > accredited valuer, in relation to a property, means a person who is: (a) accredited as a certified practising valuer by the Australian Property Institute; or (b) a professional member of the Royal Institution of Chartered Surveyors who is entitled to be described as a Chartered Valuation Surveyor; or (c) registered or otherwise authorised, under the laws of the State or Territory in which the property is situated, to value that kind of property. #### 85 Information to be contained in first default in payment notice (1) For subsection 87(3) of the Code, the information that a first default in payment notice given in the circumstances mentioned in subsection 87(1) of the Code must contain is set out in the following table. ```html <table cellspacing="0" cellpadding="0" style="width:97.82%; border-collapse:collapse"><thead><tr><td colspan="4" style="border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Prescribed information</span></p></td></tr><tr><td style="width:7.14%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Item</span></p></td><td style="width:32.18%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>If the credit contract is entered into …</span></p></td><td style="width:36.1%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>and the first default in payment notice is given …</span></p></td><td style="width:24.58%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>the information that the notice must contain is the information set out in …</span></p></td></tr></thead><tbody><tr><td style="width:7.14%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:32.18%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>before 1</span><span> </span><span>March 2013</span></p></td><td style="width:36.1%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>on or after 1</span><span> </span><span>March 2013</span></p></td><td style="width:24.58%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Form 11 or 11A</span></p></td></tr><tr><td style="width:7.14%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:32.18%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>on or after 1</span><span> </span><span>March 2013</span></p></td><td style="width:36.1%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>before 1</span><span> </span><span>December 2013</span></p></td><td style="width:24.58%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Form 11 or 11A</span></p></td></tr><tr><td style="width:7.14%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:32.18%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>on or after 1</span><span> </span><span>March 2013</span></p></td><td style="width:36.1%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>on or after 1</span><span> </span><span>December 2013</span></p></td><td style="width:24.58%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Form 11A</span></p></td></tr></tbody></table> ``` (2) For subsection 87(3) of the Code, the information that a first default in payment notice given in the circumstances mentioned in subsection 87(1A) of the Code must contain is set out in the following paragraphs: (a) that there has been a default in payment of an amount under the low cost credit contract; (b) how to arrange for payment of the amount; (c) the credit provider’s internal dispute resolution procedures and financial hardship processes; (d) the external dispute resolution procedures available with AFCA. #### 86 Information to be contained in default notice For paragraphs 88(3)(f) and (g) of the Code, the information that a default notice must contain is set out in the following table. ```html <table cellspacing="0" cellpadding="0" style="width:97.98%; border-collapse:collapse"><thead><tr><td colspan="4" style="border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Prescribed information</span></p></td></tr><tr><td style="width:6.92%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Item</span></p></td><td style="width:32.12%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>If the credit contract or mortgage is entered into</span><span> </span><span>…</span></p></td><td style="width:36.04%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>and the default notice is given …</span></p></td><td style="width:24.92%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>the information that the notice must contain is the information set out in …</span></p></td></tr></thead><tbody><tr><td style="width:6.92%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:32.12%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>before 1</span><span> </span><span>March 2013</span></p></td><td style="width:36.04%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>on or after 1</span><span> </span><span>March 2013</span></p></td><td style="width:24.92%; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Form 12 or 12A</span></p></td></tr><tr><td style="width:6.92%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:32.12%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>on or after 1</span><span> </span><span>March 2013</span></p></td><td style="width:36.04%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>before 1</span><span> </span><span>December 2013</span></p></td><td style="width:24.92%; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Form 12 or 12A</span></p></td></tr><tr><td style="width:6.92%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:32.12%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>on or after 1</span><span> </span><span>March 2013</span></p></td><td style="width:36.04%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>on or after 1</span><span> </span><span>December 2013</span></p></td><td style="width:24.92%; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Form 12A</span></p></td></tr></tbody></table> ``` #### 87 Consent to enter premises For subsection 99(2) of the Code, consent by the occupier of premises to entry to the premises is taken to have been given only if the following requirements have been complied with: (a) a request to the occupier for entry to the premises must be made by the credit provider or agent by application in writing or by calling at the premises concerned; (b) if the request is made personally, it may only be made between the hours of 8 am and 8 pm on any day other than a Sunday or public holiday; (c) the consent in writing must be in accordance with Form 13 and signed by the occupier; (d) the document of consent is not to be presented to the occupier for signature with, or as part of, any other document (unless the other document, or the remainder of the other document, contains only the provisions of section 99 of the Code). > Note 1: Subsection 99(1) of the Code provides that a credit provider, or an agent of the credit provider, must not enter any part of premises used for residential purposes for the purpose of taking possession of mortgaged goods under a goods mortgage unless the court has authorised entry or the occupier of the premises (after being informed in writing of the provisions of section 99) consented in writing to the entry. > Note 2: Under subsection 99(2) of the Code, the regulations may provide procedures for the purposes of section 99 and set out circumstances in which consent is or is not taken to have been given. #### 88 Statement about mortgagor’s rights and obligations For paragraph 102(1)(c) of the Code, a statement of a mortgagor’s rights and obligations must be a written statement in accordance with Form 14. > Note: Subsection 102(1) of the Code requires a credit provider that has taken possession of goods under a mortgage to give the mortgagor certain information, including a statement of the mortgagor’s rights and obligations in the form set out in the regulations. #### 89 Information about proceeds of sale of mortgaged goods For subsection 104(3) of the Code, the information required to be given to a mortgagor is an itemised account of each deduction made from the gross amount realised on the sale to arrive at the net proceeds of sale. > Note: Subsection 104(3) of the Code requires a credit provider that sells mortgaged goods to give the mortgagor a written notice stating the gross amount realised on the sale, the net proceeds of the sale and certain other information, including other information required by the regulations. ## Part 7‑6—Related sale contracts #### 90 Rate of interest on damages For subsection 132(1) of the Code, the prescribed rate of interest in respect of the relevant credit contract is the annual percentage rate under that contract as at: (a) the date of the judgment; or (b) if the contract was not still in force at that date—the date immediately before the contract was terminated. > Note: Subsection 132(1) of the Code allows interest to be paid on damages awarded under the linked credit provider provisions of the Code. The rate of interest is to be the rate prescribed by the regulations. #### 91 Informing debtor of rights For subsection 136(2) of the Code, the information given by the credit provider to the debtor must be: (a) a written statement in accordance with Form 15; and (b) given to the debtor within 21 days after the termination of the tied loan contract or the tied continuing credit contract. > Note 1: Subsection 136(1) of the Code provides for the termination of a linked maintenance services contract if a credit contract is terminated. > Note 2: Subsection 136(2) of the Code requires the credit provider in that case to inform the debtor in accordance with the regulations of the debtor’s rights under section 136. #### 92 Rebate of consideration For subsection 136(4) of the Code, the proportionate rebate of consideration is calculated using the formula:  where: > C is the amount of the charges under the maintenance services contract financed under the credit contract. > S is the number of whole months in the unexpired portion of the period for which maintenance was agreed to be provided. > T is the number of whole months for which maintenance was agreed to be provided. > Note 1: Subsection 136(1) of the Code provides that, if a debtor terminates a linked maintenance services contract because of the termination of the credit contract, the debtor is entitled to a proportionate rebate of consideration under the maintenance services contract. > Note 2: Subsection 136(4) of the Code provides that the regulations may prescribe the manner of calculating that proportionate rebate of consideration. ## Part 7‑7—Related insurance contracts #### 93 Particulars of insurance entered into by credit provider (1) For subsection 146(2) of the Code, the prescribed particulars of the insurance that a credit provider is to give to the debtor are the key features of the credit‑related insurance contract. (2) The key features of the contract are the following: (a) the name of the insurer; (b) the kind of insurance, the risks insured against and the exclusions; (c) the beneficiaries under the policy; (d) the expiry date of the policy; (e) the premium payable (to the extent ascertainable); (f) the fees and charges payable (to the extent ascertainable); (g) the person by whom, and the person with whom, a claim may be made in respect of the policy, and the manner of making such a claim. (3) A particular mentioned in subregulation (2) may be given by providing a copy of the policy containing the particular. > Note: Subsection 146(2) of the Code provides that, if a credit provider enters into a credit‑related insurance contract in which the debtor has a beneficial interest, the credit provider must ensure that a written notice containing particulars of the insurance prescribed by the regulations is given to the debtor within 14 days after the beneficial interest is acquired by the debtor. > Note: Credit‑related insurance consists of insurance over mortgaged property or consumer credit insurance. #### 94 Proportionate rebate of consumer credit insurance premium For subsection 148(4) of the Code, the proportionate rebate of premium is calculated using the formula:  where: > P is the amount of the premium paid (not including any amount payable in respect of a government charge). > S is the number of whole months in the unexpired portion of the period for which insurance was agreed to be provided. > T is the number of whole months for which insurance was agreed to be provided. #### 95 Notice of right to cancel mortgaged property insurance For subsection 149(2) of the Code, the information given to the debtor by the credit provider must be a written statement in accordance with Form 16. > Note: Section 149 of the Code provides that if a credit contract is terminated before the end of the term of a credit‑related insurance contract over mortgaged property financed under the credit contract, the debtor may terminate the insurance contract and recover from the insurer a proportionate rebate of premium. Subsection 149(2) provides that a credit provider must inform the debtor, in accordance with the regulations, of the debtor’s rights under section 149\. The information is to be given on the termination of the credit contract. #### 96 Proportionate rebate of premium for insurance over mortgaged property For subsection 149(4) of the Code, the manner of calculating the proportionate rebate of premium is to calculate the sum of: (a) the amount of premium paid in respect of any period of the insurance contract that has not yet commenced; and (b) 90% of the proportion of the amount of the premium for insurance paid in respect of the current period of the insurance contract attributable to the unexpired portion of that period consisting of whole months. > Note: Subsection 149(4) of the Code provides that the regulations may prescribe the manner of calculating the proportionate rebate of premium for the purposes of section 149. ## Part 7‑8—Comparison rates #### 97 Relevant comparison rate where annual percentage rate stated For subsection 161(2) of the Code, the designated amounts and terms for which a comparison rate is to be calculated are: (a) $250 for a term of 2 weeks; and (b) $1 000 for a term of 6 months; and (c) $2 500 for a term of 2 years; and (d) $10 000 for a term of 3 years; and (e) $30 000 for a term of 5 years; and (f) $150 000 for a term of 25 years. #### 98 Information about whether comparison rate relates to secured loan For subsection 162(2) of the Code, the following amounts of credit are prescribed as amounts for which a statement must be made as to whether a comparison rate is for a secured loan or an unsecured loan: (a) $10 000; (b) $30 000. #### 99 Warnings about comparison rate (1) For subsection 163(1) of the Code, the warning about the accuracy of a comparison rate in a credit advertisement must: (a) include the short statement or long statement; and (b) be given in the same form as the comparison rate is given unless the credit advertisement is on television, the internet or other electronic display medium. > Note: Subsection 164(3) of the Code explains the way in which the warning must be given for a credit advertisement on an electronic display medium. (2) The warning may also contain a statement that the credit provider does not provide credit for an amount, or a term, or both, specified in a credit advertisement. (3) The long statement is: ‘WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.’ (4) The short statement is: ‘WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.’ #### 100 Calculation of comparison rates (1) For section 166 of the Code, comparison rates are to be calculated in accordance with this regulation. (2) The comparison rate must be calculated as a nominal rate per annum, together with the compounding frequency. (3) The comparison rate is calculated using the formula:  where: > n is the number of repayments per annum to be made under the credit contract (annualised if the term of the contract is less than 12 months), except that: (a) if repayments are to be made weekly, n is 52.18; and (b) if repayments are to be made fortnightly, n is 26.09; and (c) if the contract does not provide for a constant interval between repayments, n is to be derived from the interval selected for the purposes of the definition of j. > r is the solution of the following:  where: > Aj is the amount of credit to be provided under the contract at time j (the value of j for the provision of the first amount of credit is taken to be zero). > Cj is the fee or charge (if any) payable by the debtor at time j in addition to the repayments Rj, being a credit fee or charge (other than a government fee, charge or duty) that is ascertainable when the comparison rate is disclosed (whether or not the credit fee or charge is payable if the credit is not provided). > j is the time, measured as a multiple (not necessarily integral) of the interval between contractual repayments that will have elapsed since the first amount of credit is provided under the credit contract, except that if the contract does not provide for a constant interval between repayments an interval of any kind is to be selected by the credit provider as the unit of time. > Rj is the repayment to be made at time j. > t is the time, measured as a multiple of the interval between contractual repayments (or other interval so selected) that will elapse between the time when the first amount of credit is provided and the time when the last repayment is to be made under the contract. (4) The comparison rate must be correct to at least the nearest one hundredth of 1% per annum. (5) In the application of the formulae, reasonable approximations may be made if it would be impractical or unreasonably onerous to make a precise calculation. > Note: Example: If repayments are to be made on a fixed day each month, it may be assumed that repayments will be made on that day each month even though the credit contract provides for payment on the preceding or succeeding business day when the due date is not a business day. (6) The tolerances and assumptions under sections 180 to 182 of the Code apply to the calculation of the comparison rate. (7) The comparison rate must be accompanied by a statement of the amount of credit on which it is based and the term for which credit is provided. ## Part 7‑9—Consumer leases #### 102 Consumer lease excluded from application of Part 11 of the Code (1) For subsection 171(3) of the Code, a consumer lease is excluded from the application of Part 11 of the Code if the consumer lease is in the class of consumer leases mentioned in subregulation (2). (2) The class of consumer leases is consumer leases under which: (a) the lessee is a director of the lessor; and (b) the director hires goods from the lessor in connection with the director’s remuneration or other financial benefits derived from acting as a director. #### 103 Prescribed person in relation to declarations For subsection 172(3) of the Code, the prescribed person is: (a) if the person who obtained the declaration from the lessee was the lessor—a person associated with the lessor; or (b) if the person who obtained the declaration from the lessee was a person associated with the lessor—the person associated with the lessor; or (c) if the person who obtained the declaration from the lessee was not the lessor or a person associated with the lessor—any of the following: (i) a person who obtained the declaration from the lessee; (ii) a person who referred the lessee to the person who obtained the declaration (whether the referral was for the purpose of obtaining the declaration or otherwise); (iii) a person who suggested that the lessee apply for a consumer lease, and the suggestion was made during the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person; (iv) a person who assisted the lessee to apply for a consumer lease, and the assistance was given during the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person. #### 104 Declaration about purpose of lease (1) For subsection 172(5) of the Code, the form of the declaration is: ‘I/We declare that the goods to be hired by me/us from the lessor are to be hired wholly or predominantly for business purposes.’ (2) The declaration must contain the following warning immediately below the words of the declaration mentioned in subregulation (1) or, if the consumer lease is to be made by electronic communication, prominently displayed when (but not after) the person signs: IMPORTANT You should only sign this declaration if the goods are hired wholly or predominantly for business purposes. By signing this declaration you may lose your protection under the National Credit Code. (3) The declaration must contain: (a) the signature of each person making the declaration; and (b) either the date on which the declaration is signed or the date on which it is received by the lessor. > Note: The Code applies to consumer leases only if the goods are hired for personal, domestic or household purposes. Subsection 172(2) of the Code provides that goods hired under a consumer lease are presumed not to be hired for those purposes if the lessee declares, before hiring the goods, that the goods are hired wholly or predominantly for business purposes. > Note: The declaration is not effective unless it is substantially in the form required by the regulations. #### 104A Disclosure of information in consumer leases for household goods (1) For the purposes of paragraph 174(1A)(c) of the Code, other information a consumer lease for household goods must contain is as follows: (a) an itemised list of each fee or charge (including any applicable taxes and any add‑on fees) that forms part of the total amount payable by the lessee in connection with the consumer lease; (b) for a consumer lease for a fixed term—sufficient information to enable the lessee to determine the amount of any fee or charge payable by the lessee to terminate the lease before the end of the fixed term; (c) for a consumer lease for an indefinite period—sufficient information to enable the lessee to determine the amount of any fee or charge payable by the lessee to terminate the lease; (d) in relation to the base price of goods hired under the consumer lease, as stated in the consumer lease: (i) a statement specifying whether that base price is the agreed price of the goods, the amount under subregulation 105AA(3) or the amount under subregulation 105AA(4); and (ii) if that base price is the amount under subregulation 105AA(3)—a statement specifying which of the amounts referred to in that subregulation is stated in the lease as the base price; and (iii) if that base price is the amount under subregulation 105AA(4)—a statement specifying which of the amounts referred to in that subregulation is stated in the lease as the base price; (e) the brand name (if any) and model number (if any) of goods hired under the lease, to the extent that it is reasonably practicable for the lessor to determine that information. (2) For the purposes of paragraph (1)(a), and to avoid doubt, the total amount payable by the lessee in connection with the consumer lease includes the amounts of any fees or charges, or enforcement expenses, that are: (a) of a kind referred to in subsection 175AA(4) of the Code; and (b) payable by the lessee in connection with the lease. #### 105 Explanation about rights and obligations of consumer lessees (1) For subsection 175(1) of the Code, a statement must: (a) be in writing; and (b) be in accordance with Form 17. (2) The statement may be in the form of a separate document or a part of the consumer lease document. > Note: Section 175 of the Code requires a lessor under a consumer lease to give a lessee a statement in the form required by the regulations explaining the lessee’s rights and obligations. > Note: The statement must be given within 14 days after entering into the lease. #### 105AA Base price of goods (1) For the purposes of subsection 175AA(6) of the Code, the base price of goods hired under a consumer lease is the lesser of: (a) the agreed price of the goods; and (b) either: (i) for goods that are new on the day (the lease day) the consumer lease is entered into—the amount under subregulation (3); or (ii) for goods that are not new on the lease day—the amount under subregulation (4). Agreed price (2) The agreed price of goods hired under a consumer lease is the price of the goods agreed under the consumer lease by the parties to that lease, plus any related goods and services tax (if the amount of such tax is not already included in the price of the goods agreed under the lease). Goods that are new on the lease day (3) The amount under this subregulation for goods hired under a consumer lease is as follows: (a) if: (i) it is reasonably practicable for the lessor to determine what, on the lease day, was the recommended retail price of the goods (including any goods and services tax); and (ii) on the lease day, identical goods were available for sale to the public from one or more suppliers that were independent of the lessor; then the amount under this subregulation is the recommended retail price referred to in subparagraph (i) of this paragraph; (b) if: (i) paragraph (a) does not apply; and (ii) the lessor bought the goods from a supplier that was independent of the lessor; and (iii) on the day on which the lessor bought the goods, identical goods were available for sale to the public from that supplier; and (iv) it is reasonably practicable for the lessor to determine what was the price that the lessor paid for the goods (including any related goods and services tax); then the amount under this subregulation is the price referred to in subparagraph (iv) of this paragraph; (c) if neither paragraph (a) nor (b) applies, then the amount under this subregulation is the market value of the goods on the lease day. > Note: For market value, see subregulation (7). Goods that are not new on the lease day (4) The amount under this subregulation for goods hired under a consumer lease is as follows: (a) if: (i) the goods were new when they were acquired by the lessor or by a previous acquirer of the goods; and (ii) it is reasonably practicable for the lessor to determine what, on the day on which the goods were last acquired new, was the recommended retail price of the goods (including any related goods and services tax); and (iii) on the day on which the goods were last acquired new, identical goods were available for sale to the public from one or more suppliers that were independent of the acquirer of the goods; then the amount under this subregulation is the recommended retail price referred to in subparagraph (ii) of this paragraph, reduced in accordance with subregulation (5); (b) if: (i) paragraph (a) of this subregulation does not apply; and (ii) the goods were bought, whether by the lessor or by a previous acquirer of the goods, from a supplier that was independent of the buyer of the goods; and (iii) on the day on which the goods were last bought from such a supplier, identical goods were available for sale to the public from that supplier; and (iv) it is reasonably practicable for the lessor to determine what, when the goods were last bought from such a supplier, was the price paid for the goods (including any related goods and services tax); then the amount under this subregulation is the price referred to in subparagraph (iv) of this paragraph, reduced in accordance with subregulation (5); (c) if neither paragraph (a) nor (b) of this subregulation applies, then the amount under this subregulation is the market value of the goods on the lease day. > Note 1: If the lessor was the manufacturer of the goods, see subregulation (6) for when the lessor is taken to have acquired the goods. > Note 2: For market value, see subregulation (7). (5) For the purposes of subregulation (4), the price referred to in subparagraph 4(a)(ii) or (4)(b)(iv) is to be reduced by: (a) if the period: (i) starting on the day the goods were last acquired new as mentioned in subparagraph (4)(a)(ii), or on the day the goods were last bought as mentioned in subparagraph (4)(b)(iv), whichever is applicable; and (ii) ending on the lease day; is 12 months or less—12.5% of that price; or (b) if that period is more than 12 months but less than or equal to 24 months—25% of that price; or (c) if that period is more than 24 months but less than or equal to 36 months—37.5% of that price; or (d) otherwise—50% of that price. Other matters (6) For the purposes of this regulation, if a lessor was the manufacturer of goods hired under a consumer lease, then the lessor is taken to have acquired the goods on the first day on which: (a) the manufacturing process is complete; and (b) the goods are ready for sale or lease. (7) In this regulation: > market value, of goods hired under a consumer lease, means fair market value including any goods and services tax. #### 105A Information to be contained in statement of account For section 175D of the Code, the information that must be contained in a statement of account is a disclosure that: (a) the lessee will not own the goods at the end of the consumer lease; and (b) the lessee will not have an obligation or a right to purchase the goods at the end of the consumer lease. #### 105B Information to be contained in statement of account about amount owing and other matters For paragraph 175E(1)(d) of the Code, the other information to be contained in a statement of account is the following: (a) the dates on which the statement period begins and ends; (b) particulars of any amounts paid by the lessee to the lessor during the statement period; (c) particulars of any amounts credited to the lessee’s account during the statement period; (d) particulars of payments debited from the lessee’s account and paid to a third party during the statement period; (e) any corrections to information contained in a previous statement of account. > Note: Example for paragraph (d) > Note: Insurance. #### 105C Information to be contained in end of lease statement For subsection 175H(1) of the Code, the information to be contained in an end of lease statement is the following: (a) the date when the consumer lease ends; (b) a statement that the goods leased under the consumer lease must be returned; (c) the total amount that the lessee will pay for the goods under the consumer lease (assuming that the lessee will make each payment on the dates required by the consumer lease); (d) the date when the goods must be returned; (e) the following information about the return of the goods: (i) if the goods can be collected by the lessor—a statement that the goods can be collected by the lessor, the particulars of how the collection can be arranged and an estimate of the costs (if any) that may be charged for the collection of the goods; (ii) if the goods are to be returned by the lessee—a statement that the goods must be returned to the lessor by the lessee and the particulars of how and where the goods are to be returned; (f) the amounts the lessee is liable to pay if the goods are not returned, expressed as an amount for each month that the goods are not returned; (g) a statement as to whether the lessor is prepared to negotiate the sale of the goods; (h) if the lessor is prepared to negotiate the sale of the goods: (i) an estimate of the sale price of the goods; and (ii) contact details for the person through whom the sale of the goods may be negotiated. #### 105D Circumstances in which lessor is not required to provide end of lease statement For subsection 175H(2) of the Code, the circumstances in which the lessor is not required to provide an end of lease statement are: (a) the lessor wrote off the debt of the lessee under the consumer lease; or (b) the lessor has commenced enforcement proceedings; or (c) the lessee has died, or is insolvent, and the lessee’s personal representative or trustee in bankruptcy has not requested a statement of account. #### 105E Information to be contained in written notice about change by agreement to consumer lease For paragraph 177A(1)(b) of the Code, the information to be contained in a written notice about a change by agreement to a consumer lease is the following: (a) the date of the change in the consumer lease; (b) particulars of any change in respect of goods hired under the consumer lease; (c) the amounts of any fees or charges payable after the change; (d) particulars of any amounts payable to third parties after the change; (e) the rental details under the consumer lease: (i) before the change; and (ii) after the change; (f) the amounts of any commission to be paid by or to the lessee in relation to the change; (g) the period of time by which the term of the consumer lease is increased; (h) the expiry date for the consumer lease. > Note: Example for paragraph (d) > Note: Insurance. #### 105G Information to be contained in statement of amount payable on termination of consumer lease For paragraph 179A(2)(d) of the Code, the matters that must be contained in a statement of amount payable on the termination of a consumer lease are the following: (a) the total amount to be paid, on the date of the statement, to terminate the lease; (b) the amounts the lessee is liable to pay to terminate the lease, expressed as an amount for each month from the date of the statement; (c) a statement as to whether the lessor is prepared to negotiate the sale of the goods; (d) if the lessor is prepared to negotiate the sale of the goods: (i) an estimate of the sale price of the goods; and (ii) contact details for the person through whom the sale of the goods may be negotiated. #### 105J Information to be contained in one‑off notice about direct debit default For subsection 179C(3) of the Code, the information required to be contained in a one‑off notice about a direct debit default is the information set out in Form 18. #### 105K Information to be contained in default notice For paragraphs 179D(2)(e) and (f) of the Code, the information that a default notice must contain is set out in Form 18A. #### 105L Consent to enter residential property to take possession of goods For subsection 179N(2) of the Code, consent by the occupier of premises to entry to the premises is taken to be given only if the following requirements have been complied with: (a) a request to the occupier for entry to the premises must be made by the lessor or agent by application in writing or by calling at the premises concerned; (b) if the request is made personally, it may only be made between the hours of 8 am and 8 pm on any day other than a Sunday or public holiday; (c) the consent in writing must be in accordance with Form 19 and signed by the occupier; (d) the document of consent is not to be presented to the occupier for signature with, or as part of, any other document (unless the other document, or the remainder of the other document, contains only the provisions of section 179N of the Code). > Note 1: Subsection 179N(1) of the Code provides that a lessor, or an agent of the lessor, must not enter any part of premises used for residential purposes for the purpose of taking possession of goods hired under a consumer lease unless the court has authorised entry or the occupier of the premises (after being informed in writing of the provisions of section 179N) has consented in writing to the entry. > Note 2: Under subsection 179N(2) of the Code, the regulations may provide procedures for the purposes of section 179N and set out circumstances in which consent is or is not taken to have been given. ## Part 7‑10—Miscellaneous #### 106 Tolerances relating to disclosures (1) For paragraph 180(1)(a) of the Code: (a) information about a percentage rate that contains more than 4 decimal places is within permissible tolerances if it is rounded‑off to not less than 4 decimal places (so long as it is correct to the nearest fourth decimal place); and (b) information about any amount payable that includes a fraction of a cent is within permissible tolerances if it is rounded‑off to the nearest whole cent. (2) For paragraph 180(1)(a) of the Code, information about any amount payable that: (a) depends for its accuracy on an interest charge that is correct only because of a permissible tolerance under subsection (1); and (b) is not inaccurate for any other reason; is also within permissible tolerances. (3) For this regulation and regulation 107: (a) a percentage rate may be rounded up to the nearest highest fourth decimal place only if the part of the rate being rounded up exceeds 0.00005; and (b) a fraction of a cent may be rounded up to the nearest highest whole cent only if the fraction being rounded up exceeds 0.5 cents. > Note: Section 180 of the Code provides that information disclosed in a precontractual statement or contract document etc under the Code is taken to be correctly disclosed if it is within tolerances allowed by the regulations and the disclosure is made as at a date stated in it. (4) For paragraph 180(1)(a) of the Code, information disclosed about: (a) interest charges or repayments payable; or (b) credit fees or charges that are government fees or government charges; is within permissible tolerances if it overstates the amount or amounts payable. (5) However, an overstatement mentioned in subregulation (4): (a) does not affect the amounts payable under the credit contract; and (b) is not within permissible tolerances for section 181 of the Code unless it is within permissible tolerances because of regulation 107. #### 107 Tolerances relating to amounts payable etc (1) For section 181 of the Code: (a) if the daily or other percentage rate to be used for the calculation of an amount of interest contains more than 4 decimal places, the amount of interest is within permissible tolerances if the rate used for the calculation is rounded‑off to not less than 4 decimal places (so long as it is correct to the nearest fourth decimal place); and (b) an amount charged, payable or calculated that includes a fraction of a cent is within permissible tolerances if it is rounded‑off to the nearest whole cent; and (c) if the credit provider is authorised by a law of the Commonwealth to charge (or obtain reimbursement in respect of) an amount of duty in the nature of receipts or financial institutions duty that is not within a permissible tolerance under paragraph (a) or (b), that amount is within permissible tolerances. (2) For section 181 of the Code, an amount which depends for its accuracy on an interest charge that is correct only because of a permissible tolerance under subsection (1) (and is not inaccurate for any other reason) is within permissible tolerances. > Note: Section 181 of the Code provides that all amounts charged, payable or calculated under or in connection with a credit contract, mortgage, guarantee or consumer lease comply with the Code if they are within tolerances allowed by the regulations. #### 108 Additional assumptions relating to disclosures (1) Disclosures for the purposes of the Code relating to interest charges, repayments, and fees and charges may, if any repayment is to be made, or interest charge, or fee or charge, is to be paid or debited, on a particular day, be made on the assumption that: (a) the repayment will be made, or the interest charge, or fee or charge, paid or debited, on that day even though it is not a business day; and (b) the contract provides that the repayment is to be made, or the interest charge, or fee or charge, paid or debited, on the next preceding or succeeding business day. (2) Disclosures for the purposes of the Code relating to repayments and interest charges may also be made on the assumption that the amount of credit will be provided: (a) on the date nominated for that purpose in the pre‑contractual statement given under section 16 of the Code; or (b) if no date is nominated—on the relevant date of disclosure set out in the financial statement as mentioned in subregulation 72(10); or (c) if no date is so set out—the date on which the statement is given to the debtor. (3) Subregulation (2) does not apply to: (a) a continuing credit contract; or (b) a credit contract under which credit is provided progressively and the dates on which the credit is to be provided are not ascertainable. #### 109 Contracts linked to offset accounts (1) Disclosures for the purposes of the Code relating to a credit contract linked to an offset account may be made on the assumption that the contract is not linked to the offset account. (2) If the amount of interest charges under a credit contract is affected by an offset account during a statement period: (a) the statement of account is to disclose the net interest charge debited under the credit contract during the statement period; and (b) the statement of account must also show the amount by which the net interest differs from the interest charge that would otherwise have been payable under the credit contract if the interest charge had not been affected by the offset account. #### 110 Requirements for print or type For paragraph 184(1)(b) of the Code, print or type must be not less than 10 point. > Note: Paragraph 184(1)(b) of the Code provides that a credit contract, guarantee or notice given by a credit provider under the Code, to the extent that it is printed or typed, must conform with the provisions of the regulations as to print or type. #### 110A Reverse mortgages—manner of keeping nominations or revocations (1) This regulation is made for the purposes of subsection 185A(1) of the Code. (2) If a nomination is current, or a revocation is still in effect because a new nomination of a person has not been made, the record of the nomination or revocation must include: (a) a statement that the nomination or revocation is current; and (b) the date the nomination or revocation was given. (3) If a nomination is revoked, or a revocation is no longer in effect because a new nomination of a person has been made, the record of the nomination or revocation must include: (a) the date the nomination was revoked; or (b) the date the revocation ceased to have effect because the new nomination was made. (4) The record of the nomination or revocation must be kept during the period for which the nomination or revocation is in effect. #### 111 Notices (1) For subsection 194(9) of the Code, a nomination under subsection 194(4) or (6) of the Code must be in the following form: (a) the nomination must contain the words: ‘I/We nominate \[full name of person nominated\] to receive notices and other documents under the National Credit Code on behalf of me/all of us.’; (b) the nomination must contain a prominent statement: (i) that each debtor, mortgagor or guarantor is entitled to receive a copy of any notice or other document under the Code; and (ii) that, by signing the form, the debtor, mortgagor or guarantor is giving up the right to be provided with information direct from the credit provider; (c) the nomination must contain a prominent statement that any person who has signed the form can advise the credit provider at any time in writing that the person wishes to cancel the nomination. (2) For subsection 194(9) of the Code, a consent under subsection 194(5) of the Code must be in the following form: (a) the consent must contain the words: ‘We consent to notices and other documents under the National Credit Code being sent jointly to us at \[address for service\].’; (b) the consent must contain a prominent statement: (i) that each debtor, mortgagor or guarantor is entitled to receive a copy of any notice or other document under the Code; and (ii) that, by signing the form, the debtor, mortgagor or guarantor is giving up the right to be provided with information separately from the credit provider; (c) the consent must contain a prominent statement that any person who has signed the form can advise the credit provider at any time in writing that the person wishes to cancel the consent. ## Part 7‑11—Saving and transitional provisions ### Division 1—Reliance on State and Territory Consumer Credit Codes #### 112 References in documents to Consumer Credit Code of a State or Territory (1) If a person is required to provide or use a form prescribed by these Regulations, the person may provide or use a form (the equivalent form) that: (a) is prescribed by regulations made under the Consumer Credit Code of a State or Territory mentioned in subregulation (2); and (b) has the same effect, or is the same in substance, as the form prescribed by these Regulations. (2) The Consumer Credit Codes of the States and Territories are the following: (a) the Consumer Credit (New South Wales) Code mentioned in the Consumer Credit (New South Wales) Act 1995; (b) the Consumer Credit (Victoria) Code mentioned in the Consumer Credit (Victoria) Act 1995; (c) the Consumer Credit (Queensland) Code mentioned in (and appendixed to) the Consumer Credit (Queensland) Act 1994; (d) the Consumer Credit (Western Australia) Code mentioned in the Consumer Credit (Western Australia) Act 1996; (e) the Consumer Credit (South Australia) Code mentioned in the Consumer Credit (South Australia) Act 1995; (f) the Consumer Credit (Tasmania) Code mentioned in the Consumer Credit (Tasmania) Act 1996; (g) the Consumer Credit (Australian Capital Territory) Code mentioned in the Consumer Credit Act 1995 (ACT); (h) the Consumer Credit (Northern Territory) Code mentioned in the Consumer Credit (Northern Territory) Act 1995. (3) If: (a) a person is required to provide or use a form prescribed by these Regulations; and (b) under subregulation (1), the person provides or uses an equivalent form; and (c) the form prescribed by these Regulations requires the person to provide more information than required by the equivalent form; the person may provide the additional information in a separate document with the equivalent form. (4) Subregulations (1) and (3) cease to have effect at the end of the period of 2 years starting when this regulation commences. ### Division 2—Transitional provisions for the Treasury Laws Amendment (Miscellaneous Amendments) Regulations 2019 #### 113 Compliance with subregulation 28LCE(2) and Schedule 10 If a statement is in the form that was set out in Schedule 10 immediately before the commencement of Schedule 4 to the Treasury Laws Amendment (Miscellaneous Amendments) Regulations 2019 (the amending schedule), the statement is taken to be in the form set out in Schedule 10 immediately after the commencement of the amending schedule. ### Division 4—Transitional provisions for the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Act 2023 #### 115 Transitional arrangements Regulation 51 (as substituted by Schedule 4 to the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Act 2023) applies in relation to contracts entered into on or after 13 June 2014.