Consideration resumed from 27 October.

Senate’s amendments—

(1)    Clause 2, page 2 (table item 2), omit the table item, substitute:

(2)    Clause 4, page 4 (after line 7), after the definition of appeal or review proceedings, insert:

carried over instrument means a contract or other instrument that:

             (a)    was made before commencement; and

             (b)    was in force immediately before commencement; and

             (c)    the old Credit Code of a referring State or a Territory applied to immediately before commencement.

(3)    Clause 4, page 4 (after line 12), after the definition of carried over provision, insert:

Chapter 3 start day: see subitem 19(1) of Schedule 1 to this Act.

(4)    Clause 4, page 4 (lines 20 and 21), omit the definition of commencement, substitute:

commencement means the start of 1 July 2010, or a later day prescribed by the regulations.

(5)    Clause 4, page 7 (after line 14), after the definition of registered to engage in a credit activity, insert:

registrable corporation has the same meaning as in section 7 of the Financial Sector (Collection of Data) Act 2001.

(6)    Clause 4, page 8 (after line 3), after the definition of this Act, insert:

transition end day means 30 June 2011, or a later day prescribed by the regulations.

(7)    Schedule 1, page 13 (after line 23), after Division 1, insert:

Division 1A—Application of the new Credit Code

2A Application of the new Credit Code

(1)    The new Credit Code applies from commencement.

        Note:       The new Credit Code does not apply before commencement. It also does not apply in relation to contracts or other instruments that were made before commencement, unless they are carried over instruments (see item 3).

(2)    Subitem (1) is subject to subitem 3(2).

(8)    Schedule 1, Division 2, page 13 (line 24) to page 15 (line 3), omit the Division, substitute:

Division 2—Treatment of contracts or other instruments made before commencement

3 Application of the new Credit Code to contracts or other instruments made before commencement

(1)    The new Credit Code does not apply in relation to a contract or other instrument that was made before commencement.

(2)    Despite subitem (1), the new Credit Code applies in relation to a carried over instrument.

(3)    Despite subitem (2), sections 5, 13 and 172 of the new Credit Code do not apply in relation to a carried over instrument. Instead, sections 6, 11 and 150 of the old Credit Code of a referring State or a Territory, as in force immediately before commencement, apply from commencement in relation to a carried over instrument as if those provisions respectively were sections 5, 13 and 172 of the new Credit Code.

(4)    Despite subitem (2), subsections 6(2) and 50(2), (3), (4), (5) and (8) of the new Credit Code do not apply in relation to a carried over instrument.

(5)    Despite subitem (2), subsection 72(5) of the new Credit Code does not apply in relation to a carried over instrument. Instead, the following provision applies from commencement in relation to a carried over instrument as if the provision were subsection 72(5) of the new Credit Code:

Application

        (5)    This section and sections 73 to 75 do not apply to a credit contract under which the maximum amount of credit that is or may be provided is more than an amount equal to 110% of the amount of the average loan size for the purchase of new dwellings in New South Wales as set out in the Table of Housing Finance Commitments in the most recent publication entitled Housing Finance, Australia, as published from time to time by the Australian Bureau of Statistics.

(6)    Despite subitem (2), subsection 94(4) of the new Credit Code does not apply in relation to a carried over instrument. Instead, the following provision applies from commencement in relation to a carried over instrument as if the provision were subsection 94(4) of the new Credit Code:

        (4)    This Division does not apply to a credit contract in respect of which the maximum amount of credit that is or may be provided is more than an amount equal to 110% of the amount of the average loan size for the purchase of new dwellings in New South Wales as set out in the Table of Housing Finance Commitments in the most recent publication entitled Housing Finance, Australia, as published from time to time by the Australian Bureau of Statistics.

(9)    Schedule 1, item 4, page 15 (line 11), after “commencement”, insert “in relation to a carried over instrument”.

(10)  Schedule 1, item 5, page 17 (line 9), after “commencement”, insert “, in relation to a carried over instrument,”.

(11)  Schedule 1, item 5, page 17 (line 15), after “commencement”, insert “, in relation to a carried over instrument,”.

(12)  Schedule 1, item 8, page 19 (before line 8), before paragraph (2)(a), insert:

           (aa)    a contract or other instrument that is not a carried over instrument; or

(13)  Schedule 1, item 10, page 20 (line 10), omit “that”.

(14)  Schedule 1, Part 3, page 27 (line 1) to page 28 (line 25), omit the Part, substitute:

Part 3Application of the National Credit Act (other than the new Credit Code) and Schedule 2 to this Act

Division 1—Application of the National Credit Act (other than Chapter 3 and the new Credit Code)

17A Application of the National Credit Act (other than Chapter 3 and the new Credit Code)

(1)    The National Credit Act (other than Chapter 3 and the new Credit Code) applies from commencement.

        Note 1:    The National Credit Act does not apply before commencement. However, see subitem (2), which provides that regulations made under section 329 of the National Credit Act may apply before commencement.

        Note 2:    See item 19 for the application of Chapter 3 (which deals with responsible lending conduct) of the National Credit Act.

        Note 3:    See items 2A and 3 for the application of the new Credit Code.

        Note 4:    Generally, the National Credit Act (other than the new Credit Code) does not apply to contracts or other instruments made before commencement. However, see item 18 for exceptions to this.

(2)    Despite subitem (1), regulations made under section 329 of the National Credit Act may apply on and after the day section 3 of the National Credit Act commences.

18 Treatment of contracts or other instruments made before commencement

(1)    The National Credit Act (other than Chapter 3 and the new Credit Code) does not apply in relation to a contract or other instrument that was made before commencement.

        Note 1:    See item 19 for the application of Chapter 3 (which deals with responsible lending conduct) of the National Credit Act.

        Note 2:    See items 2A and 3 for the application of the new Credit Code.

(2)    Despite subitem (1), the regulations may provide for the application of all or specified provisions of the National Credit Act to a person (including the licensing of that person) in relation to credit activities engaged in on or after commencement in relation to a carried over instrument.

(3)    Despite subitem (1), Part 4-3 of the National Credit Act (which deals with the jurisdiction and procedure of courts) applies to proceedings brought under the new Credit Code after commencement in relation to a carried over instrument.

(4)    Despite subitem (1), regulations made under section 329 of the National Credit Act for the purposes of section 330 of that Act or the new Credit Code may make provision in relation to proceedings brought after commencement in relation to a carried over instrument.

Division 2—Application of Chapter 3 of the National Credit Act

19 Application of Chapter 3 of the National Credit Act

When all of Chapter 3 (responsible lending conduct) applies to all licensees

(1)    Chapter 3 (which deals with responsible lending conduct) of the National Credit Act applies on and after the day (the Chapter 3 start day) that is 1 January 2011, or a later day prescribed by the regulations.

        Note:       Chapter 3 of the National Credit Act does not apply before the Chapter 3 start day. However, under subitem (2), certain provisions of Chapter 3 apply before then to some licensees (and registered persons because of item 36 of Schedule 2 to this Act).

When certain provisions of Chapter 3 apply earlier for some licensees

(2)    Despite subitem (1), sections 112, 115, 116, 117, 118, 119, 122, 123, 124, 128, 129, 130, 131, 133, 135, 138, 139, 140, 141, 142, 145, 146, 147, 151, 152, 153, 154, 156, 162, 163 and 164 (which deal with the main responsible lending conduct rules) of the National Credit Act apply in relation to conduct engaged in by a licensee in the period that:

             (a)    starts on commencement; and

             (b)    ends immediately before the Chapter 3 start day;

if:

             (c)    the licensee is neither an ADI nor a registrable corporation; and

             (d)    the conduct is engaged in in relation to a contract or other instrument made on or after commencement.

Application of Chapter 3 in relation to contracts or other instruments

(3)    Chapter 3 of the National Credit Act does not apply in relation to a contract or other instrument that was made before commencement.

        Note:       Chapter 3 of the National Credit Act applies in relation to contracts or other instruments made on or after commencement, but see subitem (4) for exceptions to this.

(4)    Despite subitem (3), sections 120, 132, 143 and 155 of the National Credit Act do not apply in relation to a contract or other instrument that was made before the Chapter 3 start day.

(5)    This item is subject to subitem 18(2) (which deals with regulations that provide for the application to a person of the National Credit Act).

Division 3—Application of Schedule 2 to this Act

20 Application of Schedule 2 to this Act in relation to contracts or other instruments

(1)    Schedule 2 to this Act (which deals with registration) does not apply in relation to a contract or other instrument that was made before commencement.

        Note 1:    Schedule 2 applies in relation to contracts or other instruments made on or after commencement.

        Note 2:    Schedule 2 applies from the time it commences (see item 3 of the commencement table in section 2). However, some provisions of Schedule 2 expressly provide that parts of Schedule 2 apply from a later time.

(2)    Despite subitem (1), the regulations may provide for the application of all or specified provisions of Schedule 2 to a person (including the registration of that person) in relation to credit activities engaged in on or after commencement in relation to a carried over instrument.

(15)  Schedule 1, item 21, page 29 (lines 2 to 7), omit the item, substitute:

21 Regulations about ASIC’s approach during the transitional period

The regulations may provide for the approach ASIC must take in the administration of this Act or the National Credit Act during the period that:

             (a)    starts on the day section 3 of the National Credit Act commences; and

             (b)    ends on 30 June 2011, or a later day prescribed by the regulations.

(16)  Schedule 2, heading to Division 1, page 33 (lines 3 to 5), omit the heading, substitute:

Division 1—Prohibition that applies only from commencement to 31 December 2010, or later prescribed day

(17)  Schedule 2, item 3, page 33 (lines 8 to 11), omit paragraphs (a) and (b), substitute:

             (a)    starts on commencement; and

             (b)    ends on 31 December 2010, or a later day prescribed by the regulations.

(18)  Schedule 2, heading to subitem 4(3), page 33 (line 28), omit the heading, substitute:

Defences

(19)  Schedule 2, item 4, page 34 (after line 13), at the end of the item, add:

(4)    For the purposes of subitems (1) and (2), it is a defence if:

             (a)    the person engages in the credit activity on behalf of another person (the principal); and

             (b)    the person is a representative of the principal; and

             (c)    the person’s conduct in engaging in the credit activity is within the authority of the principal; and

             (d)    the principal is exempted from subitems (1) and (2) under paragraph 41(1)(a), 41(3)(a) or 42(a).

        Note:       For the purposes of subitem (2), a defendant bears an evidential burden in relation to the matter in subitem (4): see subsection 13.3(3) of the Criminal Code.

(20)  Schedule 2, heading to Division 2, page 34 (lines 14 to 16), omit the heading, substitute:

Division 2—Prohibition that applies only from 1 January 2011, or later prescribed day, to the transition end day

(21)  Schedule 2, item 5, page 34 (lines 19 to 22), omit paragraphs (a) and (b), substitute:

             (a)    starts immediately after the end of the period referred to in item 3; and

             (b)    ends on the transition end day.

(22)  Schedule 2, heading to subitem 6(3), page 35 (line 9), omit the heading, substitute:

Defences

(23)  Schedule 2, item 6, page 35 (line 11), omit “for or”.

(24)  Schedule 2, item 6, page 35 (after line 27), at the end of the item, add:

(4)    For the purposes of subitems (1) and (2), it is a defence if:

             (a)    the person engages in the credit activity on behalf of another person (the principal); and

             (b)    the person is a representative of the principal; and

             (c)    the person’s conduct in engaging in the credit activity is within the authority of the principal; and

             (d)    the principal is exempted from subitems (1) and (2) under paragraph 41(1)(a), 41(3)(a) or 42(a).

        Note:       For the purposes of subitem (2), a defendant bears an evidential burden in relation to the matter in subitem (4): see subsection 13.3(3) of the Criminal Code.

(25)  Schedule 2, item 7, page 36 (lines 1 and 2), omit paragraph (b), substitute:

             (b)    ends on the transition end day.

(26)  Schedule 2, item 11, page 38 (lines 8 to 11), omit paragraphs (a) and (b), substitute:

             (a)    starts on 1 April 2010, or a later day prescribed by the regulations; and

             (b)    ends on 30 June 2010, or a later day prescribed by the regulations.

(27)  Schedule 2, item 12, page 39 (after line 29), after subitem (2), insert:

(2A) For the purposes of paragraph (2)(c), a reference to a credit activity in the definitions of banned from engaging in a credit activity under a law of a State or Territory and State or Territory credit licence in subsection 5(1) of the National Credit Act (as those definitions apply for the purposes of this Act because of subsection 4(2) of this Act) includes a reference to an activity that would be a credit activity if the new Credit Code had applied from the day section 3 of the National Credit Act commences.

(28)  Schedule 2, page 43 (before line 13), before item 16, insert:

15A Application of this Division

This Division (other than subitem 16(1)) applies during the period that:

             (a)    starts on commencement; and

             (b)    ends on the transition end day.

(29)  Schedule 2, item 16, page 43 (lines 17 to 20), omit paragraphs (1)(a) and (b), substitute:

             (a)    starts at the same time as the start of the period referred to in subitem 11(2); and

             (b)    ends on the transition end day;

(30)  Schedule 2, item 16, page 43 (lines 24 to 28), omit subitem (2) (not including the heading).

(31)  Schedule 2, item 21, page 47 (lines 26 to 29), omit the item, substitute:

21 Cancellation of all registrations on transition end day

The registration of every registered person is cancelled at the end of the transition end day.

(32)  Schedule 2, item 23, page 48 (line 15), omit “ceases to engage in credit activities”, substitute “does not engage, or ceases to engage, in credit activities”.

(33)  Schedule 2, item 23, page 49 (after line 16), after subitem (1), insert:

(1A) For the purposes of paragraph (1)(e), a reference to a credit activity in the definitions of banned from engaging in a credit activity under a law of a State or Territory and State or Territory credit licence in subsection 5(1) of the National Credit Act (as those definitions apply for the purposes of this Act because of subsection 4(2) of this Act) includes a reference to an activity that would be a credit activity if the new Credit Code had applied from the day section 3 of the National Credit Act commences.

(34)  Schedule 2, item 24, page 50 (after line 26), after subitem (2), insert:

(2A) For the purposes of paragraph (2)(c), a reference to a credit activity in the definitions of banned from engaging in a credit activity under a law of a State or Territory and State or Territory credit licence in subsection 5(1) of the National Credit Act (as those definitions apply for the purposes of this Act because of subsection 4(2) of this Act) includes a reference to an activity that would be a credit activity if the new Credit Code had applied from the day section 3 of the National Credit Act commences.

(35)  Schedule 2, item 32, page 54 (line 5), omit “(other than item 36)”, substitute “(other than items 32A, 36 and 39)”.

(36)  Schedule 2, item 32, page 54 (lines 7 and 8), omit paragraph (b), substitute:

             (b)    ends on the transition end day.

(37)  Schedule 2, page 54 (after line 8), after item 32, insert:

32A Application of sections 64 and 65 of the National Credit Act before commencement

(1)    This item applies during the period that:

             (a)    starts at the same time as the start of the period referred to in subitem 11(2); and

             (b)    ends immediately before commencement.

(2)    Sections 64 and 65 (which deal with the authorisation of credit representatives) of the National Credit Act apply during the period as if:

             (a)    all references to a licensee were references to a registered person; and

             (b)    all references to a licensee’s licence were references to a registered person’s registration.

(3)    An authorisation of a credit representative that is given under section 64 or 65 of the National Credit Act (as those sections apply because of subitem (2)) during the period is taken not to be given until commencement.

(4)    Despite subitem (3), a body corporate that has been authorised as a credit representative under subsection 64(1) of the National Credit Act (as it applies because of subitem (2)) during the period may authorise natural persons as credit representatives under subsection 65(1) of the National Credit Act (as it applies because of subitem (2)) during the period.

(38)  Schedule 2, item 33, page 54 (line 30), after “subitem (1)”, insert “or item 32A”.

(39)  Schedule 2, item 33, page 55 (line 3), after “subitem (1)”, insert “or item 32A”.

(40)  Schedule 2, item 33, page 55 (line 6), after “subitem (1)”, insert “or item 32A”.

(41)  Schedule 2, item 36, page 56 (lines 3 to 22), omit the item, substitute:

36 Application of Chapter 3 of the National Credit Act

When all of Chapter 3 (responsible lending conduct) applies to all registered persons

(1)    Chapter 3 (which deals with responsible lending conduct) of the National Credit Act applies during the period that:

             (a)    starts on the Chapter 3 start day; and

             (b)    ends on the transition end day;

as if:

             (c)    all references to a licensee were references to a registered person or licensee; and

             (d)    all references to licensees were references to registered persons or licensees.

        Note:       The Chapter 3 start day is 1 January 2011 (or later prescribed day). That day is when Chapter 3 of the National Credit Act starts to apply. However, under subitem (2) of this item, certain provisions of Chapter 3 apply before then to some registered persons.

When certain provisions of Chapter 3 apply earlier for some registered persons

(2)    Despite subitem (1), sections 112, 115, 116, 117, 118, 119, 122, 123, 124, 128, 129, 130, 131, 133, 135, 138, 139, 140, 141, 142, 145, 146, 147, 151, 152, 153, 154, 156, 162, 163 and 164 (which deal with the main responsible lending conduct rules) of the National Credit Act apply, in relation to a registered person who is neither an ADI nor a registrable corporation, during the period referred to in subitem 19(2) of Schedule 1 as if:

             (a)    all references to a licensee were references to a registered person or licensee; and

             (b)    all references to licensees were references to registered persons or licensees.

        Note:       The period referred to in subitem 19(2) of Schedule 1 starts on commencement and ends immediately before the Chapter 3 start day.

Some provisions of Chapter 3 never apply to registered persons

(3)    Despite subitem (1), the following provisions of Chapter 3 of the National Credit Act do not apply in relation to registered persons:

             (a)    paragraphs 113(2)(d), 126(2)(d), 127(2)(d), 136(2)(d), 149(2)(d), 150(2)(d) and 160(3)(d) (which deal with including Australian credit licence numbers in credit guides);

             (b)    subparagraphs 113(2)(h)(i), 126(2)(e)(i), 127(2)(e)(i), 136(2)(h)(i), 149(2)(e)(i), 150(2)(e)(i) and 160(3)(f)(i) (which deal with including information about internal dispute resolution procedures in credit guides).

Application of Chapter 3 in relation to contracts or other instruments

(4)    Despite subitem 20(1) of Schedule 1, sections 120, 132, 143 and 155 of the National Credit Act do not apply in relation to a contract or other instrument that was made before the Chapter 3 start day.

        Note:       Subitem 20(1) of Schedule 1 provides that this Schedule applies in relation to contracts or other instruments made after commencement. However, sections 120, 132, 143 and 155 of the National Credit Act, which apply in relation to registered persons because of subitem (1) of this item, do not apply in relation to contracts or other instruments made before the Chapter 3 start day.

(5)    This item is subject to subitem 20(2) of Schedule 1 (which deals with regulations that provide for the application of this Schedule in relation to contracts or other instruments made before commencement).

(42)  Schedule 2, item 39, page 57 (lines 12 to 16), omit the item, substitute:

39 Application of Chapter 7 of the National Credit Act

(1)    Chapter 7 (which deals with miscellaneous matters) of the National Credit Act, other than sections 327, 329 and 331, applies during the period that:

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