Compliance with other relevant laws is a core credit licence obligation under Section 47(1)(d) of the NCCP Act.
From 6 June 2012 ADI’s which do not comply with the new price signalling laws in the Competition and Consumer Act in relation to their credit activities will not only risk a fine of up to $10 million but also breach their credit licence.
The new laws prohibit anti-competitive price signalling and other information disclosures in activities undertaken by an Authorised Deposit-taking Institution when taking deposits, (otherwise than as part-payment for identified goods or services) and lending money.
The Competition and Consumer Amendment Act (No. 1) 2011 prohibits both the private disclosure of pricing information between competitors and disclosures which take place in the public domain and/or are related to information other than pricing information if they were made with the purpose of substantially lessening competition.
Exemptions include:
•Disclosures in the ordinary course of business (eg advertising)
•Discussions between credit providers and credit service providers and for insolvency purposes
But pricing discussions between competitors in relation to interest rates and fees and charges will be regulated. More
What other laws are relevant to compliance with your credit licence conditions?
• ASIC Act;
• Banking Act;
• AML/CTF Act;
• Privacy Act (credit reporting provisions).
In respect of the Privacy Act, it is worth noting the recent case of Q and Financial Institition [2011] AICmrCN 11 relating to the improper disclosure of a borrower’s personal information.
