The Transitional Act’s reach is deliberately wide. It directly binds:

• Credit providers and lessors who held carried-over instruments on 1 July 2010. Their pre-existing contracts are now governed by the new Credit Code (subject to the carve-outs in item 3 of Schedule 1) and they must comply with the substituted rights and liabilities created by items 11 and 12.
• Registered persons under Schedule 2. Between April 2010 and June 2011 this category included virtually every person who engaged in credit activities who had not yet obtained a full Australian credit licence. They were subject to the prohibition in items 4 and 6, the conduct obligations in item 16, the reporting and audit obligations in items 17–19, and the suspension and cancellation regime in items 20–31.
• Credit representatives and other representatives of registered persons. Items 32A, 33 and 36 applied most of Parts 2-3 and 3 of the National Credit Act (with modifications) so that authorisations, holding-out rules and responsible-lending obligations extended to representatives.
• Consumers, guarantors and debtors under carried-over instruments. They gain the benefit (or burden) of the new Code’s provisions on hardship variations, unjust transactions, disclosure and enforcement, but only to the extent those provisions correspond to the old Code or are expressly applied.
• Courts and tribunals. Item 4 converts state-court proceedings into federal jurisdiction; item 6 preserves state tribunal jurisdiction. Courts must now apply the substituted-rights rules and the reference rules in item 5 when construing the new Code.
• ASIC. The Act confers on ASIC functions in relation to registration (items 11–15, 20–31 of Schedule 2), information-gathering (item 19), and the administration of transitional regulations (s 6). Later schedules give ASIC additional powers (and obligations) in respect of each successive reform.
• APRA-regulated bodies and ADIs. Items 15 and 25 of Schedule 2, and item 15 of the main Act, impose consultation requirements before ASIC can impose conditions or cancel registrations that would affect banking business or APRA-supervised activities.
• Ministers. Where an ADI is involved, certain condition-imposition and cancellation powers are transferred from ASIC to the Minister (item 15(2) of Schedule 2 and item 25(2)).

Because the later schedules apply the amending provisions to both new and (in many cases) pre-existing contracts, the Transitional Act continues to affect every participant in the consumer credit market more than fourteen years after its original commencement.

The Transitional Act itself creates few standalone duties; its primary role is to map old duties and rights onto the new regime.

Registered persons’ duties (Schedule 2):

• The general conduct obligation in item 16(3)(a) to “do all things necessary to ensure that the credit activities authorised by the registration are engaged in efficiently, honestly and fairly”.
• Compliance with registration conditions (item 16(3)(b)), the credit legislation (item 16(3)(c)), and reasonable steps to ensure representatives comply (item 16(3)(d)).
• Conflict-management obligation (item 16(3)(e)).
• Obligation to be a member of the AFCA scheme (item 16(1)).
• Duty to lodge statements or audit reports when directed by ASIC (item 17) and to provide information required by regulations (item 18).
• Duty to give reasonable assistance to ASIC (item 19).

Rights created or preserved:

• Substituted rights and liabilities under items 11 and 12 operate both for the benefit and the burden of the parties. A consumer’s old right to apply for a hardship variation under the old Code becomes a substituted right under the corresponding new-Code provision, with the same time limit (item 13(4)).
• Interlocutory orders made before commencement continue to have the same effect as if made in federal jurisdiction (item 4(5)).
• The right to continue tribunal proceedings under state law is expressly preserved (item 6(2)).

Defences:

• Employees, directors and credit representatives of a registered principal have a defence to the prohibition in items 4 and 6 if their conduct is within authority and the principal is registered or has applied for a licence (items 4(3), 6(3)).

ASIC’s powers:

• Power to impose, vary or revoke conditions (item 14), to suspend or cancel registration (items 22–25), and to exempt persons or classes (item 41).

The later schedules add further layered rights and duties. For example, Schedule 5 (Consumer Credit Legislation Amendment (Enhancements) Act 2012) applies the amended hardship provisions in ss 72–74 and 88 of the new Credit Code only to contracts entered into on or after commencement of that Schedule, but preserves the old 90-day notice rules for pre-1 March 2013 contracts in certain circumstances (items 5(4)–(5) of Schedule 5 to the Transitional Act).

Civil penalties and offences are created directly in Schedule 2. The prohibition on engaging in credit activities without registration or a licence carries a civil penalty of 2,000 penalty units and a criminal offence of 200 penalty units or 2 years’ imprisonment (items 4(1)–(2) and 6(1)–(2)). The same penalty levels apply to the obligations to lodge statements (item 17(6)–(9)), provide information (item 18(2)–(5)) and give assistance (item 19(1)–(3)).

Item 37 applies Chapter 4 of the National Credit Act (remedies) as if references to “this Act” included the Transitional Act, and expressly treats civil penalty provisions in the Transitional Act as civil penalty provisions for the purposes of the National Credit Act. Section 180 (unlawful credit activities orders) is modified so that it catches contraventions of the Schedule 2 prohibitions (item 37(2)).

Infringement-notice regimes can be created by regulation (item 43). Penalty units for pre-commencement conduct that is prosecuted after commencement remain at $100 (item 17 of Schedule 1), preserving the pre-2010 value despite the general increase in s 4AA of the Crimes Act 1914.

Enforcement proceedings and appeal or review proceedings in relation to pre-commencement court orders are expressly excluded from the new Code (item 5(3)), preventing retrospective criminal or civil liability.

The Transitional Act is expressly tied to the National Credit Act. Section 4(2) provides that expressions defined in the National Credit Act (other than in the new Credit Code) have the same meaning in the Transitional Act. Item 2 of Schedule 2 applies Part 1-2 (definitions) of the National Credit Act to the registration regime.

It interacts with state and territory laws in two opposing ways. Item 6(2) declares that the Transitional Act and the National Credit Act are “not intended to exclude or limit” state or territory laws relating to tribunal proceedings or orders. Conversely, the object in item 2(1) of Schedule 1 is to treat the old Credit Codes as though they had always been Commonwealth law, thereby displacing state law for carried-over instruments in all respects except tribunal matters.

Constitutional safeguards appear in s 7: no provision applies to the extent that it would result in an acquisition of property otherwise than on just terms (Constitution s 51(xxxi)).

The Legislation Act 2003 is modified in two places: s 6(4) disapplies the retrospective-application rule for transitional regulations, and item 41(6)–(7) imposes additional publication requirements before an ASIC exemption or declaration can support a criminal prosecution.

Later schedules frequently interact with the Corporations Act 2001 (banning orders, AFS licences, disqualification from managing corporations) and the Banking Act 1959 (special procedures for ADIs). The AFCA scheme membership obligation in item 16(1) links the Transitional Act to the corporations and financial services external dispute-resolution framework.

The Transitional Act has been amended on more than a dozen occasions, each time by inserting a new schedule that supplies application rules for the amending Act in question. These changes were required because the original 2009 transitional provisions could not anticipate the detailed policy choices later made on credit-card lending, small-amount credit contracts, consumer leases, reverse mortgages, best-interests obligations, reportable situations and registries modernisation.

Schedule 4 (2011) was inserted to deal with the first wave of responsible-lending and credit-card reforms. Schedule 5 (2012) added rules for enhancements, reverse mortgages and short-term credit. Schedule 6 (2018) addressed credit-limit increase invitations and unsuitability assessments for credit cards. Schedule 7 (2020) dealt with registries modernisation and the complex validation of acts done during the “interim period” after a postponed commencement. Schedules 8–21 continue the pattern, each adding fresh application rules for penalties, mandatory credit reporting, Hayne Royal Commission measures, corporate collective investment vehicles and modernising business communications.

The reason for this incremental approach is legislative economy: rather than reopen the National Credit Act itself for every reform, Parliament uses the Transitional Act as a “schedule of schedules” that keeps all temporal rules in one place. The result is a statute that is now longer than the original National Credit Act it supports, but which provides practitioners with a single reference point.

The source text contains no reported court challenges. However, the structure itself has attracted academic and practitioner commentary on three recurring issues.

First, the “corresponds” test in s 5 has been criticised for its open-textured nature. Although s 5(2) lists differences that are not sufficient to prevent correspondence (numbering, minor technical changes, tribunal-to-court shifts, ASIC substitution), the regulations may still declare that two provisions do or do not correspond (s 5(4)). This has created uncertainty when a pre-2010 contract contains a clause that refers to a specific old-Code section number.

Second, the differential treatment of court and tribunal proceedings (items 4–6) has produced forum-shopping concerns. Because tribunal orders and proceedings remain wholly outside the new Code, consumers in jurisdictions with active credit tribunals (notably Victoria and New South Wales) have sometimes enjoyed procedural advantages not available in federal court.

Third, the breadth of the regulation-making power in s 6 has been questioned. Regulations can modify the Act, apply retrospectively (subject to the s 6(5) safeguard), and override the primary legislation. Although no court has yet struck down a transitional regulation, the potential for executive override of parliamentary transitional policy remains a live constitutional and rule-of-law issue.

No specific cases are cited in the source text, and none are invented here.

Most practitioners assume that the new Credit Code applies uniformly to all credit contracts after 1 July 2010. In fact, item 3(1) of Schedule 1 states the opposite: the new Credit Code “does not apply in relation to a contract or other instrument that was made before commencement” unless it is a carried-over instrument. Even then, numerous provisions are disapplied or substituted (items 3(3)–(6)). The practical consequence is that a 2008 mortgage may still be governed by a patchwork of old Code provisions that have been “deemed” into the new Code under item 12.

Another common error is to treat registration under Schedule 2 as equivalent to licensing. Registration was deliberately temporary; every registered person’s registration was cancelled on the transition end day (item 21) or earlier if a licence was granted or refused (item 20). Many compliance programs still contain outdated references to “registered persons”.

The interaction between the hardship provisions and the 110% housing-loan threshold is frequently missed. Items 3(5) and 3(6) substitute modified versions of old ss 72(5) and 94(4) that continue to use the ABS Housing Finance publication test. Advisers who rely on the current National Credit Code thresholds alone will give incorrect advice on whether a pre-2010 contract can be varied on hardship grounds.

Item 17 of Schedule 1 preserves the old $100 penalty unit for pre-commencement conduct. This can produce a dramatic difference in exposure when ASIC elects to prosecute historical conduct after 2010.

Finally, the later schedules are not merely “application” provisions; some contain substantive transitional modifications (e.g. item 5(4)–(5) of Schedule 5 disapplying former notice requirements for 90-day hardship variations). Failing to consult the relevant schedule for the particular amending Act can lead to incorrect conclusions about when a new obligation or prohibition commenced.

Compliance with the Transitional Act is now largely a matter of due diligence on contract vintage and regulatory status.

1. Date the instrument. For any credit contract, mortgage, guarantee or consumer lease, establish the exact date it was “made”. If before 1 July 2010, classify it as a carried-over instrument only if it was in force immediately before commencement and an old Credit Code applied (s 4(1)). Apply the specific carve-outs in item 3(3)–(6) of Schedule 1.

2. Map the corresponding provision. Use s 5 and the regulations made under it to determine which new-Code provision corresponds to the old-Code provision that originally governed the contract. Where no direct counterpart exists, item 12 deems the old provision into the new Code (with modifications) solely for the purpose of preserving old rights and liabilities.

3. Check registration/licensing history. If the provider was registered under Schedule 2, confirm that registration was not suspended or cancelled under items 20–25 and that any conditions imposed under item 14 were observed until the licence was granted. The general conduct obligation in item 16(3)(a) survives as a potential source of civil penalty liability even after registration ended.

4. Consult the correct schedule. For any post-2009 amendment (credit cards, small-amount loans, consumer leases, best-interests duty, reportable situations, etc.), locate the relevant schedule (Schedules 4–21) and apply its date-specific rules. Many schedules distinguish between contracts entered into before or after a particular commencement day, and some contain further carve-outs for conduct that occurred before that day.

5. Maintain dual audit trails. Because substituted rights and liabilities under items 11 and 12 can turn on events that occurred before commencement, compliance systems must retain records of pre-2010 notices, hardship applications, disclosures and enforcement steps. Item 10 preserves the ongoing effect of things done under carried-over provisions that had “ongoing significance”.

6. Monitor regulations. Section 6 regulations can modify the Act and have been used extensively. Any compliance manual must be cross-checked against the latest version of the National Consumer Credit Protection (Transitional and Consequential Provisions) Regulations.

7. AFCA membership and assistance obligations. Registered persons (and their successors) remain subject to the AFCA membership obligation that commenced on 1 April 2010 (item 16(1)). The obligation to provide statements, audit reports and assistance to ASIC (items 17–19) continues for historical periods even after a licence has been granted.

8. Document the “despite” analysis. When advising on enforcement or variation of a pre-2010 contract, prepare a short table showing (a) the old-Code provision, (b) the corresponding new-Code provision, (c) any “despite” rule in item 3, and (d) the substituted right or liability under item 11 or 12. This single document will withstand both ASIC scrutiny and court challenge.

By treating the Transitional Act as the primary reference point rather than an afterthought, credit providers, advisers and regulators can navigate the otherwise bewildering interaction between nine former state and territory Codes and the layered amendments that have been made to the National Credit Act since 2009. The statute’s complexity is the price of legal continuity; its meticulous detail is what makes that continuity possible.