Credit reforms open for consultation

Amendments to the National Consumer Credit Protection Act 2009 will give effect to some of the reforms announced as part of the Government’s Fairer, Simpler Banking policy and are now open for consultation.

The National Consumer Credit protection Amendment (Credit Card and Home Loans) Bill is proposed to be introduced to Parliament. Key reforms in the bill call for a limit to how much credit card accounts can go over their specified limits, the abolishment of fees when they do so, as well as a ban on unsolicited credit limit extensions and the requirement that all credit card application forms include a clear summary of key account features. The reforms would also require that credit card providers allocate repayments to higher interest debts first. Home loan lenders would be required to give potential borrowers a ‘Key Facts Sheet’ to enable them to compare between home loans.

The closing date for submissions is March 8.

Other reforms announced as part of the Fairer, Better Banking policy were intended to be introduced through regulations to the National Consumer Credit Protection Act 2009 and would be subject to consultation at a later stage, Treasury stated. Such reforms include the requirement that lenders inform consumers about the implications of only paying the minimum repayment amounts on their statements.