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(Jul 14, 2010) New national consumer credit laws came into force in Australia on July 1, 2010. The reforms are intended to "improve credit and loan transactions, make financial institutions more responsible and to reduce red-tape for lenders and brokers." (Press Release, No. 77, Hon. Chris Bowen & Hon. Tony Robinson, New National Consumer Credit Laws Protect Consumers from Predatory Lenders (June 28, 2010),
.) The laws replace the individual state and territory laws that have been in place since 1992.

The commencement of the new regime was launched by the Australian Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, and the Victorian Minister for Consumer Affairs, Tony Robinson. The press release issued by the Ministers states that the laws will introduce:

  • responsible lending conduct requirements to ensure consumers are not lured into credit contracts they cannot afford to repay;
  • extended hardship criteria, boosting the availability of relief to loans of up to AU$500,000 (about US$442,700);
  • provisions to stop predatory lenders from exploitative practices such as using household items as security for cash loans; and
  • a single national licensing regime and consistent requirements across Australia for lenders and brokers. (Id.)

Enforcement of the laws will shift from state-based consumer affairs agencies and become the responsibility of the Australian Securities and Investments Commission (ASIC). (Darren Gray, Uniform Laws to Tackle Predatory Lenders, THE AGE, June 29, 2010,
.) Bowen said:

These important national credit reforms will provide greater protection for Australian borrowers against unfair and predatory lending practices. For lenders and brokers, a single national licensing regime and uniform laws across all jurisdictions will reduce the regulatory burden. This is a significant step in our efforts towards a seamless national economy. (Press Release, supra.)

The National Consumer Credit Protection Bill was introduced in Parliament in June 2009 and was passed in October 2009. The legislative changes followed a 2008 agreement by the Council of Australian Governments (which includes representatives from each state and territory and from the federal government) that the federal government should take over responsibility for the regulation of consumer credit. (ASIC, National Consumer Credit Regulation, (last visited July 12, 2010).)

The National Consumer Credit Action Plan is now moving into a second phase of implementation, with a discussion paper released on July 7, 2010. This paper outlines the "options for enhancing the new national consumer credit law." (ASIC, supra; see also Press Release, Hon. Chris Bowen, Release of Green Paper on Phase Two of the COAG National Credit Reforms (July 7, 2010),

Relevant legislation, reports, and other background information about the reforms are available at

Author: Kelly Buchanan More by this author
Topic: Banks and financial institutions More on this topic
Jurisdiction: Australia More about this jurisdiction

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Last updated: 07/14/2010