Federal Register of Legislation - Australian Government

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A Bill for an Act to amend the Banking Act 1959 to place controls on changes in the variable interest rates of ADIs, and for related purposes
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Registered 24 Nov 2010
Introduced Senate 18 Nov 2010

 

2010

 

The Parliament of the

Commonwealth of Australia

 

THE SENATE

 

 

 

 

Presented and read a first time

 

 

 

 

 

 

Banking Amendment (Controls on Variable Interest Rate Changes) Bill 2010

 

No.      , 2010

 

(Senator Bob Brown)

 

 

 

A Bill for an Act to amend the Banking Act 1959 to place controls on changes in the variable interest rates of ADIs, and for related purposes

  

  


Contents

1............ Short title............................................................................................ 1

2............ Commencement.................................................................................. 1

3............ Schedule(s).......................................................................................... 2

Schedule 1—Amendment of the Banking Act 1959                                             3


A Bill for an Act to amend the Banking Act 1959 to place controls on changes in the variable interest rates of ADIs, and for related purposes

The Parliament of Australia enacts:

1  Short title

                   This Act may be cited as the Banking Amendment (Controls on Variable Interest Rate Changes) Act 2010.

2  Commencement

                   This Act commences on the day after this Act receives the Royal Assent.

3  Schedule(s)

                   Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1Amendment of the Banking Act 1959

1  At the end of subsection 9(4)

Add “or the requirements of section 9AD”.

2  After section 9

Insert:

9AD  Variation of conditions of banks’ authorities—variable interest rates on loan and mortgage products

             (1)  APRA must, within 30 days of the commencement of this section, vary the conditions of all existing section 9 authorities to give effect to this section and any new section 9 authority granted after the commencement of this section must include conditions that give effect to this section.

             (2)  A section 9 authority must require an ADI that offers loan or mortgage products, including loans or mortgages offered through or packaged by third parties:

                     (a)  in the case of an official interest rate increase—not to increase its variable interest rates for loans and mortgages by more than the percentage increase in the official interest rate; and

                     (b)  in the case of an official interest rate decrease—to decrease its variable interest rates for loans and mortgages by not less than the percentage decrease in the official interest rate within 3 business days after that percentage decrease; and

                     (c)  not to change its variable interest rates for loans and mortgages except in accordance with paragraph (a) or (b).

             (3)  In this section:

official interest rate means the cash rate target announced periodically by the Reserve Bank.

variable interest rate means a rate that is advertised by an ADI as its variable interest rate for a loan or mortgage product.

Sunset

             (4)  This section ceases to have effect at the end of the period of 2 years beginning on the day on which this section commenced.