The corporate watchdog has issued Credit (Amendment) Instrument 2018/114, which amends Class Order 14/41 as it applies to providers of consumer credit and consumer leases.
For industry and consumers, this extends the arrangements for credit hardship that are currently in place. It allows flexibility for both sides in dealing with a simple hardship arrangement.
The exemption was due to expire on 1 March 2018 and now extends until 1 March 2020. This will allow ASIC time to continue to consult with the industry and affected stakeholders in relation to the hardship process and the interaction with credit-reporting requirements.
“Where a consumer is experiencing financial difficulties in repaying their loan, a consumer may ask their credit provider to vary or change their loan repayments under the hardship provisions of the National Consumer Credit Protection Act 2010 (National Credit Act),” ASIC said in a statement.
“The procedures for processing hardship variation applications require credit providers and lessors to record any changes to the contract and provide written notice to the debtor or lessee. This is the case even where the parties come to an agreement for a simple arrangement, which means an agreement that defers or reduces the obligations of a debtor or lessee for a period of no more than 90 days.”
The exemption for simple arrangements was introduced in 2013 following changes to the hardship provisions of the National Credit Act.
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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