ASIC has released a new version of Regulatory Guide 220 Early termination fees for residential loans: unconscionable fees and unfair contract terms(RG 220).
The updated guidance takes into account the effect of the National Consumer Credit Protection Regulations 2010 which regulate termination fees for loans secured by residential property.
The guidance in RG 220 is now only relevant to credit contracts secured by residential property:
- with early termination fees, that were entered into before 1 July 2011, or
- that contain early termination fees which are not prohibited by the regulations (e.g. break fees on fixed rate loans).