On 25 August 2011, the Assistant Treasurer announced measures to increase the level of protection for the provision of short-term, small amount lending. These changes follow on from the issues identified during the course of Phase One of the National Consumer Credit Protection Reforms, and have been addressed as part of Phase Two. Credit providers will be expected to comply with additional obligations, including:
- the imposition of a cap on costs for loans under $2000 that run for less than two years;
- a prohibition on refinancing small amount contracts; and
- disclosure of the availability of alternative options, including no/low interest loans, Centrelink products and hardship programs with utilities or other credit providers.
The Regulation Impact Statement was prepared by the Treasury and was assessed as adequate by the Office of Best Practice Regulation.