ASIC has released a consultation paper, Product Intervention Orders: Short Term Credit and Continuing Credit Contracts, on its proposed use of its product intervention powers to address significant consumer detriment in the short term credit and continuing credit contracts industries.
Today's release follows:
- ASIC's first short term credit product intervention order made on 12 September 2019: 19-250MR. This order expired on 13 March 2021.
- ASIC's earlier consultation on a proposed continuing credit contract product intervention order through Consultation Paper 330 Using the product intervention power: Continuing credit contracts (CP 330) published on 9 July 2020 and the Addendum to CP 330 published on 10 November 2020.
This consultation continues ASIC's work to address high cost predatory lending impacting vulnerable consumers.
CP 355 outlines ASIC's proposal to make product intervention orders which prohibit these products from being provided in circumstances which involve unreasonably high costs, in excess of the cost caps in the relevant exemptions in s6(1) and s6(5) of the National Credit Code.
The consultation process
ASIC invites stakeholder feedback on two proposals:
- Proposal D1 - Make the short term credit product intervention order
- Proposal D2 - Make the continuing credit product intervention order
When providing feedback, please specify which Proposal you are providing feedback for. This will help ASIC consider whether, and if so how, to exercise the product intervention power for each Proposal.
Following this consultation, if ASIC is minded to make the short term credit product intervention order, ASIC will first seek the Minister's written approval.
All intervention orders subsequently made must be published on ASIC's website, and a public notice will be issued in relation to the intervention.
