Consumer Credit changes start in June 2023

Changes to Small Amount Credit Contracts (SACCs) and Consumer Leases will take effect on 12 June 2023.

Summary of the changes to SACCs and Consumer Leases

The Financial Sector Reform Act 2022 (Act) details the changes made to SACCs and Consumer Leases.

SACCs:

SACCs are special types of credit contracts that have a term of 16 days or more, (but no longer than 12 months) and offer a credit limit of no more than $2000.

Changes to SACCs includes the following:

• Fees: Credit licensees cannot charge monthly fees for the residual term of the SACC where the consumer repays the full amount of the loan early;
• Repayments: SACCs must have equal repayments and repayment intervals over the life of the loan (subject to limited exceptions);