The National Consumer Credit Protection Amendment Regulation 2012 (No. 3) was registered on 11 December 2012.

This regulation amends the National Consumer Credit Protection Regulations 2010 and specifies the details of the obligations introduced by the Consumer Credit Legislation Amendment (Enhancements) Act 2012 to the regulation of reverse mortgages and consumer leases.

Reverse mortgage negative equity protection

The provisions relating to the method for calculating the market value of a reverse mortgaged property, when a property either has or has not been sold commences on 12 December 2012.

Under the Credit Enhancements Act a reverse mortgage borrower will not have to pay more than the market value of their home as repayment for a reverse mortgage (even if the amount of interest that has accrued would result in the balance of the debt exceeding that value).

Consumer leases disclosure

The provisions relating to consumer leases commence on 1 March 2013.

The Credit Enhancements Act include additional disclosure requirements of lessors and requirements on lessors to obtain consent before taking possession of rental goods.

A consumer lease is defined as a contract for the hire of goods by a natural person or strata corporation under which that person or corporation does not have a right or obligation to purchase the goods but where they would pay an amount in excess of the cash value of the goods.

The Regulations specifies the content of disclosure requirements for lessors in the Credit Act, as follows:

• Periodic statements of account – setting out that the lessee will not own the goods at the end of the consumer lease, the lessee will not have an obligation or a right to purchase the goods at the end of the lease, of amounts owing and particulars of any payments;
• End of lease statements – setting out the date the lease ends, the total amount paid by the consumer under the lease, when and how the goods may be returned or collected by the lessor, the amounts the lessee is liable to pay if the goods are not returned and whether the lessor is prepared to sell the rental goods, and if so, an estimate of the sale price and contact details for the person whom the sale of goods can be negotiated;
• Written notices about a change by agreement to the consumer lease – setting out the date and particulars of any changes, repayment details, amount(s) payable to third parties, the period of time the lease is increased by and the proposed new expiry date of the lease;
• Statements of amount payable on termination of the lease – setting out the total amount to be paid to terminate the lease, the amount to be paid of the rental goods are not returned, whether the lessor is prepared to sell the rental goods, and if so, an estimate of the sale price and contact details for the person whom the sale of goods can be negotiated;
• Notices about direct debit defaults; and
• The consent to enter residential property to take possession of rental goods.