A Bill for an Act to amend the National Consumer Credit Protection Act 2009 in relation to fees imposed by credit providers, and for related purposes
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Consumer Credit Protection Amendment (Fees) Act 2011.
2 Commencement
(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
| Commencement information |
| Column 1 | Column 2 | Column 3 |
| Provision(s) | Commencement | Date/Details |
| 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table | The day this Act receives the Royal Assent. | |
| 2. Schedules 1 and 2 | The day after this Act receives the Royal Assent. | |
Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.
(2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.
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Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.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 1—Amendment of the National Consumer Credit Protection Amendment (Fees) Bill 2011
1 Before section 31 of the National Credit Code (in Division 4 of Part 2)
Insert:
30B Credit fees or charges relating to credit contracts
(1) A credit fee or charge payable by a debtor to a credit provider must be reasonable.
(2) ASIC may, if satisfied on the application of a debtor or guarantor that a credit fee or charge is not reasonable, apply to the court for an order annulling or reducing the credit fee or charge and for any other ancillary or consequential orders.
(3) In determining whether a credit fee or charge is not reasonable, ASIC must have regard to whether the amount of the credit fee or charge materially exceeds:
(a) the credit provider’s reasonable costs of undertaking the activity or service to which the credit fee or charge relates; or
(b) the credit provider’s average reasonable costs of undertaking the activity or service to which the credit fee or charge relates in respect of that class of contract.
(4) In considering an application by ASIC under subsection (2), the court must have regard to whether the amount of the credit fee or charge the subject of the application materially exceeds:
(a) the credit provider’s reasonable costs of undertaking the activity or service to which the credit fee or charge relates; or
(b) the credit provider’s average reasonable costs of undertaking the activity or service to which the credit fee or charge relates in respect of that class of contract.
Schedule 2—Amendment of the Banking Act 1959
1 At the end subsection 9(4)
Add “or the requirements of section 9AF”.
2 After section 9
Insert:
9AF Variation of conditions of certain authorities
(1) APRA must, within 30 days of the commencement of this section, vary the conditions of relevant existing section 9 authorities to give effect to this section and any new section 9 authority granted after that commencement to which this section applies must include conditions that give effect to this section.
(2) The section 9 authority for a bank which has a market share of more than 10% must prohibit the bank from imposing an early termination fee in respect of any loan agreement or mortgage contract entered into by the bank after the commencement of this section.
(3) If a bank which has a market share of more than 10% has an interest of 51% or more in a subsidiary which is an ADI, the section 9 authority for that ADI must prohibit the ADI from imposing an early termination fee in respect of any loan agreement or mortgage contract entered into by the ADI after the commencement of this section.
(4) In this section:
bank means an Australian ADI that is permitted under section 66 of the Banking Act 1959 to assume or use:
(a) the word bank, banker or banking; or
(b) any other word (whether or not in English) that is of like import to a word referred to in paragraph (a).
early termination fee means any additional charge imposed on a borrower or mortgagor in any situation in which the borrower or mortgagor chooses to pay out the loan agreement or mortgage contract, as the case may be, ahead of the time specified in the relevant loan or mortgage contract.
market share means market share determined by APRA on the basis of proportion of total deposits.