Short term credit facilities and continuing credit contracts – complying with product intervention orders

There are two Product Intervention Orders (Credit PI Orders) prohibiting the provision of short-term credit and continuing credit contracts that include fees charged to retail clients that breach the cost caps established in the relevant exemptions outlined in subsections 6(1) and 6(5) of the National Credit Code.

ASIC has issued Consultation Paper 371, proposing an extension of the Credit PI Orders until 1 October 2032.

What are the Exemptions?

(a) Short Term Credit Facilities

Under the short-term credit exemption in s6(1) of the National Credit Code, the National Credit Code does not apply where:

• the provision of credit is limited to a total period that does not exceed 62 days;