au iconAU



Simple credit hardship arrangements secure further extension

The corporate regulator has extended the exemption for simple arrangements for credit hardship for both credit providers and lessors for a further two years as it continues its consultation process.

Simple credit hardship arrangements secure further extension
smsfadviser logo

ASIC has announced that it has issued Credit (Amendment) Instrument 2018/114 that extends the exemptions granted under transitional regulations, set out in ss 69A and 69B of the National Consumer Credit Protection (NCCP) Act Regulations 2010 that relieve credit providers and lessors from the obligation to provide a written response to a hardship notice in certain circumstances.

The exemption was due to expire on 1 March 2018 and is now extended until 1 March 2020.

The extension will allow flexibility for both the industry and consumers in dealing with a simple hardship agreement.

Previously, consumers experiencing financial difficulties could ask their credit provider to vary or change their loan repayments under the hardship provisions of the National Consumer Credit Protection Act 2009 (National Credit Act) but required credit providers and lessors to record any changes to the contract and provide written notice to the debtor or lessee.

The exemption for simple arrangements - where an agreement that defers or reduces the obligations of a debtor or lessee for a period of no more than 90 days, was introduced in 2013 following changes to the hardship provision of the National Credit Act.

ASIC said the extension would allow to time to continue to consult with industry and affected stakeholders in relation to the hardship process and the interaction with credit reporting requirements.

Subscribe to Public Accountant

Receive the latest news, opinion and features directly to your inbox