Financial hardship and inclusion

The Salvation Army provided a short submission on the National Consumer Credit Protection Amendment (Financial Sector Reform) Regulations 2023 (the Regulations) to give effect to the government’s response to the Review of the Small Amount Credit Contract Laws (the Review).  

These Regulations would enhance the consumer protection framework for small-amount credit contracts (SACCs) and consumer leases, protecting individuals from getting into unmanageable debts, while ensuring these products can continue to fulfil an important role in the economy.  

These Regulations would: 

• require lenders to check the financial situation of consumers before entering a contract; 
• create stronger income requirements for both SACCs and consumer leases; 
• targeted anti-avoidance behaviours of lenders of credit contracts and product intervention orders; 
• simply termination fees and base price for hired goods; and 

• improve disclosure requirements for lenders, as well as penalties for lenders who do not comply.  

The Salvation Army, along with others in the community sector, is optimistic that the draft Regulations will promote financial inclusion and be an effective protection for consumers.