ASIC’s report on relief decisions for June to September 2011 includes the following information about relief under the National Credit Act and National Credit Code:

• ASIC granted conditional relief from the requirement to hold a credit licence for the provision of loans to members, or eligible persons preparing to be members, of a ministry. ASIC granted this relief because it considered that if relief was not granted, there was a potential consequence that the loan program would be withdrawn, or there would be an increase to interest rates and credit fees and charges. This would have a detrimental effect on the ability of members, or eligible persons preparing to be members, of a ministry to obtain and repay the loans. Relief was also granted from the responsible lending obligations. ASIC also granted partial relief from the National Credit Code to mirror the conditions of the employee loan exemption in s6(11).
• ASIC granted relief to two credit providers from the prohibition on mortgage exit fees in s23(1) of the National Credit Code and reg 79A of the National Credit Regulations in relation to a form of credit contract, known as an ‘equity finance mortgage loan’ or ‘shared appreciation loan’ (EFM loan), that requires payment by the consumer of a percentage of an increase in value of secured property upon termination of the loan, instead of a traditional interest charge. ASIC granted conditional relief on the basis that:
  1. the payments did not penalise consumers for early termination of the EFM loan because they were calculated in the same way at both the loan expiry date and in the event of early repayment, and so did not appear to discourage consumers from switching credit providers; and
  2. if relief was refused, there was a risk that these loan products, which provide flexibility to consumers by offering an alternative to traditional interest bearing loans, would no longer be available.
  ASIC imposed conditions on the relief to ensure that the terms of the contract that specified the method of calculation of the payments could not be varied during the term of the contract and the pre-contractual statement and the contract document prominently disclose information about how the payments would be calculated, including worked dollar examples, and a warning that the payments may constitute a significant lump sum amount in the event of a significant increase in the value of the residential property or if the contract remains in force for a lengthy period of time.
• ASIC refused to grant licensing relief to an entity that provides a direct debit and credit card billing and payment service. ASIC decided not to grant relief because it considered that the applicant could rely on the exemption in reg 24(9) of the National Consumer Credit Protection Regulations 2010 for a clerk or cashier that engages in a credit activity in the ordinary course of activities as a clerk or cashier. To the extent the applicant may engage in additional credit activities outside this exemption, ASIC was not satisfied that the licensing requirements would be disproportionately burdensome.