Treasury has released for consultation an Exposure Draft Bill and Regulations amending the credit card consumer protection provisions of the National Consumer Credit Protection Act 2009

If passed the draft Bill would:

• tighten responsible lending obligations to require that the suitability of a credit card contract for a consumer is assessed on the consumer’s ability to repay the credit limit of the contract within a period determined by the Australian Securities and Investments Commission (ASIC). This requirement will apply to licensees that provide credit assistance, and licensees that are credit providers, in relation to both new and existing credit card contracts from 1 January 2019;
• prohibit credit card providers from making any unsolicited credit limit offers in relation to credit card contracts by broadening the existing prohibition to all forms of communication with a consumer and removing the informed consent exemption These amendments apply in relation to both new and existing credit card contracts from 1 January 2018;
• simplify the calculation of interest charges in relation to credit cards by prohibiting credit card providers from retrospectively charging interest on credit card balances, or part of a balance, that has had the benefit of an interest-free period. These amendments apply in relation to both new and existing credit card contracts from 1 January 2019; and
• require credit card contracts entered into on or after 1 January 2019 to allow consumers to reduce credit card limits and terminate credit card contracts and require credit card providers to establish and maintain a website that allows consumers to request to exercise these entitlements online.

Further possible reforms have been submitted for further consumer testing by the Australian Government’s Behavioural Economics Team (located in the Department of Prime Minister and Cabinet) to determine their efficacy.