Manager
Intermediaries and Regulatory Powers Unit
Retail Investor Division
The Treasury
Langton Crescent
PARKES ACT 2600

Re: National Consumer Credit Protection Amendment (Small Amount Credit Contracts) Regulation 2014
       [Released for comment 10th Feb 2014.]

The Federation supports the proposed amendments as drafted.

The addition of regulation 4D puts into law one of the two exemptions which were covered in ASIC Class Order 13/818. This was, you will recall, to overcome the issue of the permitted establishment fee and monthly fee putting the amount of credit over the $2000 limit.  However, it is what is missing, we would make comment on.  These amendments do not appear to make any attempt to put into a regulation the other exemption in CO 13/818 which allowed a credit provider to pass on the DDR fee to a borrower. This Class Order exemption should be drafted into these amendments.

Our sense is that there will be few changes moving forward, if that is the case, we strongly urge that these amendments also address two other simply fixed technical issues previously raised with treasury as far back as the 9th January 2013;

1.	The unintended gap between the upper limit of a SACC product, being $2000, the lower limit of a MACC product being $2001.
i.e. a SACC - the credit limit of the contract is $2,000, yet a MACC is at least $2,001 (or such other amount as is prescribed by the regulations)
leaving a gap between $2,000.01 to $2000.99

2.	Comparison rate table conflict with Short Term Credit Contracts, which are banned products.

On 1 March 2013 it will become illegal to offer a short-term credit contract as that term is defined.  That is, loans of less than 16 days are not permitted.  However, it still remains a requirement to quote a comparison rate for a loan of $250 for a term of 2 weeks where a $250 loan for 2 weeks "most closely represents the typical" loan offered.

Treasury had previously advised the fix for this was drafted – this fix should be included in these amendments.

Regards,

Phil Johns   
CEO