The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Chris Bowen

Chris Bowen

Minister for Financial Services, Superannuation and Corporate Law

9 June 2009 - 14 September 2010

Media Release of 28/06/2010


Joint Media Release
The Hon Tony Robinson MP
Minister for Gaming
Minister for Consumer Affairs
Minister Assisting the Premier on Veterans' Affairs

New National Consumer Credit Laws Protect Consumers From Predatory Lenders

Stronger standards for banks and financial institutions against unfair lending practices are the key features of historic national reforms to credit launched in Melbourne today.

The Commonwealth Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, and Victorian Minister for Consumer Affairs, Tony Robinson, launched the National Consumer Credit Code, to improve consumer protection in credit and loan transactions, make financial institutions more responsible and to reduce red-tape for lenders and brokers.

The National Consumer Credit Code improves consumer protection and fosters more prudent lending conduct by introducing:

  • Responsible lending conduct requirements to ensure consumers are not lured into credit contracts they cannot afford to repay;
  • Extended hardship criteria, boosting the availability of relief to loans of up to $500,000;
  • Provisions to stop predatory lenders from exploitative practices such as using household items as security for cash loans; and
  • A single national licensing regime and consistent requirements across Australia for lenders and brokers.

Mr Bowen said the national credit reform package will come into force on 1 July 2010 replacing the State-and Territory-based credit laws that had been in place since 1992.

"1 July 2010 marks a significant reform achievement and the culmination of a practical co-operative partnership between all levels of government, industry, consumer groups, policy makers and regulatory authorities," Mr Bowen said.

"These important national credit reforms will provide greater protection for Australian borrowers against unfair and predatory lending practices.

"For lenders and brokers, a single national licensing regime and uniform laws across all jurisdictions will reduce the regulatory burden.

"This is a significant step in our efforts towards a seamless national economy."

Mr Robinson said the new national code would prevent financial institutions from sending unsolicited offers to increase credit card limits to customers they knew would find it difficult to manage a higher limit.

"Using credit cards is very convenient for consumers, but there is the real risk for some consumers of getting into unsustainable amounts of debt," he said.

"The global financial crisis has been an important lesson for financial institutions, regulators and governments about the importance of more responsible lending practices.

"Ensuring lenders do not encourage customers to take on unsupportable amounts of debt is a key consumer protection measure, allowing consumers to enjoy the convenience of credit will reducing the risk of getting into problematic amounts of debt."

Mr Robinson said Victoria had led the way on consumer protection in credit transactions and was the first state to require credit providers be members of an ASIC-approved dispute resolution scheme, as well as introducing protections against unfair contract terms in credit contracts.

The Brumby Labor Government also funds free financial counselling services across the state, including the MoneyHelp program, a service available to all Victorians who have lost their jobs, are working reduced hours or who are at risk of unemployment.

This Government also provides access to affordable credit through the No-Interest Loans Scheme for eligible low-income Victorians.

"Introducing prudent regulation of credit and providing consumers with the information and support services they need to make sound financial decision is the key to ensuring Australians manage debt," Mr Robinson said.

For more information about the National Consumer Credit Code, go to or

28 June 2010