National Consumer Credit Protection Act 2009

This section applies when determining, for the purposes of subsection 131(1), whether a low cost credit contract will be unsuitable for a consumer under paragraph 131(2)(b) if the contract is entered, or the credit limit of the contract is increased, in the period covered by the assessment mentioned in subsection 131(1).

This section does not affect whether a low cost credit contract will be unsuitable for a consumer under paragraph 131(2)(a) or (c).

For the purpose of applying subsection 131(1) in relation to a licensee entering a low cost credit contract (the initial contract) with a consumer, if the credit limit of the initial contract, at the time the initial contract is entered, will be less than or equal to the threshold amount, then it is presumed (unless the contrary is proved) that the initial contract will not be unsuitable for the consumer under paragraph 131(2)(b) if the initial contract is entered in the period covered by the assessment.

However, subsection (2) does not apply if:

the licensee satisfies paragraph 128(c) in relation to entering the initial contract by making an assessment that would satisfy that paragraph in relation to entering a larger contract with the consumer (see subsection 133BXD(2)); and

the credit limit of the larger contract is greater than the threshold amount.

For the purpose of applying subsection 131(1) in relation to an increase (the relevant increase) made by a licensee to the credit limit of a low cost credit contract (the initial contract) with a consumer, if the credit limit of the initial contract after the increase will be less than or equal to the threshold amount, then it is presumed (unless the contrary is proved) that the initial contract will not be unsuitable for the consumer under paragraph 131(2)(b) if the relevant increase occurs during the period covered by the assessment.

However, subsection (4) does not apply if:

the licensee previously satisfied paragraph 128(c) in relation to entering the initial contract by making an assessment that would have satisfied that paragraph in relation to entering a larger contract with the consumer (see subsection 133BXD(2)); and

the credit limit of the larger contract was greater than the threshold amount; and

because of subsection 133BXD(4), the licensee is not required to make a new assessment in order to satisfy paragraph 128(c) into relation to the relevant increase.

In this section:

has a credit limit that is greater than the credit limit of the initial contract when the initial contract is entered; and

has terms that are otherwise substantially the same as the terms of the initial contract when the initial contract is entered.

$2,000, unless paragraph (b) applies; or

if the regulations prescribe another dollar amount (whether larger or smaller) for the purposes of this paragraph—that other dollar amount.