Many credit providers have arrangements with social and community clubs where credit products are offered to members, sometimes on concessional terms and conditions. There is an exemption in the National Consumer Credit Protection Regulations (reg. 20(11)) that clubs or associations may be able to rely so that they are not required to hold an Australian Credit Licence (or be the appointed credit representative of a licensee).
The organisation must meet the following conditions for the exemption:
- The organisation provides services and makes benefits available to members of the organisation, or a program or facility operated or conducted by or within the organisation.
- An incidental benefit of membership of the organisation, program or facility is that members can apply for a particular credit contract or consumer lease offered by a licensee or a registered person, or to obtain services or benefits under a particular credit contract or consumer lease offered by a licensee or a registered person.
- The organisation provides credit services in relation to the particular credit contract or consumer lease to members or persons likely to become members under a contract or agreement with the licensee or registered person.
- It would not ordinarily be the case that the credit to be provided under the credit contract is provided predominantly for the payment for services, goods or benefits provided by the organisation or an associate of the organisation, or that the goods to be hired under the consumer lease are supplied by the organisation or an associate of the organisation.
Some important things to note:
- the credit or lease must be an incidental benefit of membership (therefore not the main benefit of membership).
- the benefit doesn’t have to be something exclusively offered to members of the organistion by the credit provider.
- there must be an agreement between the organisation and the credit provider under which the credit services of the organisation are provided.
- ordinarily the credit must not be provided mainly for payment of services, goods or benefits provided by the organisation (or in the case of a lease, the hired goods must not be ordinarily supplied by the organisation).