ASIC has released Report 604 Credit card lending in Australia – An update (REP 604), which sets out the changes being made by lenders to help consumers with credit card debt following ASIC Report 580 Credit card lending in Australia (REP 580).
Report 580 made it clear that ASIC expects credit providers to:
- take proactive steps to address problematic credit card debt and products that do not suit consumers;
- minimise the extra credit provided to consumers who regularly exceed their credit limit, and
- allocate repayments for all credit cards in the more favourable way required for cards entered into after July 2012.
ASIC engaged with the ten largest credit providers that were part of its review (American Express, ANZ, Bendigo and Adelaide Bank, Citigroup, CBA, HSBC, Latitude, Macquarie, NAB, and Westpac) and sought their commitment to change. These commitments are described in Report 604.
These commitments are voluntary and go beyond the current legal obligations under the National Consumer Credit Protection Act 2009 and the changes that took effect on 1 January 2019. Background.
Many credit providers are:
- trialling proactive measures—such as tailored communications and/or structured payment arrangements—to help consumers with potentially problematic credit card debt or who are failing to repay balance transfers;
- restricting the amount by which consumers can exceed their credit limit to 10%;
- taking a fairer approach to balance transfers, such as allowing interest-free periods on new purchases; and
- enhancing disclosure about cancelling old credit cards.