Queensland consults on consumer credit interest rate cap legislation

The Queensland Attorney-General and Minister for Justice, Kerry Shine has released exposure drafts of the Consumer Credit
(Queensland) Amendment Bill 2008
(pdf) and the Consumer Credit (Queensland)
Special Provisions Regulation 2008

The Bill will introduce the concept of a maximum annual percentage rate for consumer credit contracts. The Regulation prescribes a 48 per cent per annum annual percentage rate cap on consumer
loans (based on interest rates, fees and charges). Credit fees or charges arising from the establishment or maintenance of a temporary credit facility by an ADI will not be included in the calculation.

There are currently
no caps on interest rates in Queensland and lenders can charge high
interest rates, fees and charges on loans.

The Queensland Government is seeking industry and community comment in relation to the draft bill that will amend the Consumer Credit (Queensland ) Act 1994 and accompanying regulation.

Credit providers who charge above the
legislated maximum will be required to pay back any amount over the cap
and will face civil penalties of up to $500,000 for breaching the
Consumer Credit Code. They will also face criminal penalties of $10,000 for individuals and $50,000 for corporations.

The closing date for submissions is 15 February 2008.

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