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Credit Card Reforms Regulation Impact Statement – Treasury

On 24 March 2011, the Treasurer announced the introduction of legislation to Parliament dealing with the regulation of credit card providers, in the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill 2011. This implements the Fairer, Simpler Banking election commitment announced during the 2010 election. Under this proposal, credit card providers will be expected to meet additional obligations, including:

  • Allocating repayments to the part of a debt that is incurring higher interest charges;
  • Providing a clear summary of key features of the product on credit card application forms;
  • Prohibiting the charging of fees for exceeding credit card limits except where the borrower has opted to exceed that limit, and agrees that the fee should occur; and
  • Prohibiting credit card providers from making unsolicited offers in respect to increasing credit limits, unless the borrower has specifically agreed to receive such offers.

In total, the proposal includes eight separate measures. The Regulation Impact Statement was prepared by the Treasury and was assessed as adequate by the Office of Best Practice Regulation.