The Government’s ongoing banking and credit reforms are causing confusion in respect of implementation timing.

The exposure draft National Consumer Credit Protection Amendment (Credit Card and Home Loans) Bill contains 2 specific provisions in relation to transitional application of the new requirements (if passed):

1. Division 4 of Part 3-2A of the amended Act (Credit provider not to offer to increase the credit limit of a credit card contract) will apply to credit card contracts whether entered into before, on or after commencement;
2. Divisions 5 (Division 5—Use of credit card in excess of credit limit) and 6 of Part 3-2A of the amended Act (Order of application of payments made under credit card contracts) will apply to credit card contracts entered into after commencement.

The draft Bill does not specfically require Fact Sheets for credit card contracts and home loans be given to existing borrowers.

The draft National Consumer Credit Protection Amendment Regulations 2011 set out the proposed scope of exit fees to be banned for new home loan contracts from 1 July 2011.

The Regulations will not affect fees in existing home loan contracts but ASIC’s guidelines in RG 220 and the National Credit Code’s unconscionability test will continue to apply to these.

However if existing home loans are refinanced by way of a new contract after 1 July 2011 the new Regulations will apply.

The Government has not yet responded to submissions in respect of these proposals.