The following changes are effective 20 December 2019.
Changes to the penalties for breaching Lender Responsibility Principles
Those who breach the Lender Responsibility Principles (including on contracts that are already in existence) now face penalties of up to $600,000 for a company and $200,000 for an individual and may be liable to borrowers for statutory damages. Prior to the change there were no financial penalties for breaching the Lender Responsibility Principles. You can find out more about how to comply with the lender responsibilities in the Responsible Lending Code.
Amendments to how disclosure can be made
There are a number of amendments to the way in which disclosure can be made that apply to disclosure made after 20 December 2019 (including on existing contracts):
You can disclose any agreed decrease in a credit limit after 20 December 2019 within 5 working days of change taking effect or with the next continuing disclosure statement.
You will need to take reasonable steps to locate the borrower or guarantor, but if after doing that you cannot locate them you will not need to:
disclose any variations made under a contractual power
disclose any variations to guarantors
make transfer disclosure.
You can now make electronic disclosure (if the recipient consents) by sending a communication that enables the person to access the disclosure statement (for example a link to a disclosure statement) or tells them how to access the disclosure statement (for example telling borrowers where their disclosure is stored on-line). Disclosure can be made this way providing:
the disclosure statement is readily accessible at the time it was sent and over the life of the contract
the statement can be stored in a permanent and legible form.
You can now provide electronic disclosure to two people sharing the same information system by sending it once.
Changes to repossession enforcement action
In particular situations you can now take repossession enforcement action, despite a written complaint from the borrower or a hardship application.
Currently the law does not allow you to take enforcement action if you have received, but not decided, a hardship application or if the borrower has made a written complaint that has not been decided.
You are now able to take enforcement action if your dispute resolution scheme gives notice that repossession would be in the borrowers’ best interest and if you agree with the borrower that the enforcement action can proceed. This applies in situations where you have received a complaint or hardship application on agreements that are in existence on 20 December 2019.
Expansion of enforcement response options for the Commission to include enforceable undertakings
The Commission is now able to accept enforceable undertakings in relation to breaches of the CCCF Act. This applies to conduct before and after 20 December 2019. For more information on enforceable undertakings please see our Enforcement Response Guidelines.
Changes to the enforcement of guarantees
You are now unable to enforce a guarantee if you have failed to make reasonable inquiries to be satisfied that the guarantor can meet their obligation without suffering substantial hardship. However, you can ask the Court to be able to enforce a guarantee in these circumstances.