Footnotes

Chapter 1 - Introduction

[1]        Senate Standing Committee for the Scrutiny of Bills, Alert Digest no. 7 of 2011, 6 July 2011, p. 2.

Chapter 2 - Schedule 1—Reasonable fees or charges

[1]        Explanatory Memorandum, National Consumer Credit Protection Bill 2009, p. 239.

[2]        National Credit Code, s. 78(3).

[3]        National Credit Code, s. 78(4).

[4]        Australian Investments and Securities Commission, Regulatory Guide 220—Early termination fees for residential loans: Unconscionable fees and unfair contract terms, November 2010, paragraph RG 220.30. The guide also provides a non-exhaustive list of possible situations.

[5]        Commonwealth of Australia et al, A guide to the unfair contract terms law, 2010, p. 8.

[6]        The unfair contract terms provisions also do not apply to insurance contracts regulated under the Insurance Contracts Act 1984, nor do they apply to constitutions of companies, managed investment schemes or other kinds of bodies.

[7]        Commonwealth of Australia et al, A guide to the unfair contract terms law, 2010, p. 10.

[8]        Australian Investments and Securities Commission, Regulatory Guide 220—Early termination fees for residential loans: Unconscionable fees and unfair contract terms, November 2010, paragraph RG 220.72.

[9]        National Consumer Credit Protection Amendment Regulations 2011 (No. 2) and the National Consumer Credit Protection Amendment Regulations 2011 (No. 3).

[10]      Mr Jim Murphy, Executive Director, Markets Group, Department of the Treasury, Senate Economics References Committee Hansard, Inquiry into competition in the Australian banking sector, 13 December 2010, p 41.

[11]      Australian Government, Competitive and Sustainable Banking System, December 2010, p. 7.

[12]      Explanatory Memorandum, Consumer Credit Protection Amendment (Fees) Bill 2011, p. 2.

[13]      Proposed subsection 30B(4) of the National Credit Code. Also, proposed subsection (3) outlines what ASIC must have regard to when assessing an application from a debtor or guarantor.

[14]      Mortgage and Finance Association of Australia, Submission 1, p. 9.

[15]      Professor Milind Sathye, Submission 2.

[16]      Australian Bankers' Association, Submission 3, p. 2.

[17]      Mortgage and Finance Association of Australia, Submission 1, p. 9; Professor Milind Sathye, Submission 2, p. 3.

[18]      Mortgage and Finance Association of Australia, Submission 1, p. 3.

[19]      National Credit Code, s. 78.

[20]      Australian Investments and Securities Commission, Regulatory Guide 220—Early termination fees for residential loans: Unconscionable fees and unfair contract terms, November 2010, paragraph RG 220.71-72.

[21]      Australian Bankers' Association, Submission 3, p. 2.

[22]      Australian Bankers' Association, Submission 3, p. 5.

[23]      National Consumer Credit Protection Regulations 2010, r. 79A(4).

[24]      National Credit Code, s. 78(4).

[25]      Professor Milind Sathye, Submission 2, p. 3.

[26]      Professor Milind Sathye, Submission 2, p. 2.

[27]      Professor Milind Sathye, Submission 2, p. 3.

[28]      This section provides for the court to make changes to obligations under credit contracts on grounds of hardship and unjust transactions, such as unconscionable interest and other charges.

[29]      A number of Acts require that for an application to be valid it must be in the form prescribed by the regulations and contain the information required by the form, be accompanied by any other information or documents prescribed by the regulations and be accompanied by the fee (if any) prescribed by the regulations.

[30]      Paragraph 4.7 of the Legal Services Directions 2005 requires that certain Commonwealth agencies such as ASIC not start court proceedings unless they have received written legal advice from lawyers whom the agency is allowed to use in the proceedings indicating that there are reasonable grounds for starting the proceedings.

[31]      Professor Milind Sathye, Submission 2, p. 3.

Chapter 3 - Overview of early termination fees and Schedule 2

[1]        Standard discharge fees relate to the costs associated with terminating accounts and other final arrangements. Australian Investments and Securities Commission, Regulatory Guide 220—Early termination fees for residential loans: Unconscionable fees and unfair contract terms, November 2010, paragraph RG 220.2.

[2]        Australian Investments and Securities Commission, Regulatory Guide 220—Early termination fees for residential loans: Unconscionable fees and unfair contract terms, November 2010, paragraph RG 220.2.

[3]        Australian Investments and Securities Commission, Regulatory Guide 220—Early termination fees for residential loans: Unconscionable fees and unfair contract terms, November 2010, paragraph RG 220.2.

[4]        National Consumer Credit Protection Amendment Regulations 2011 (No. 2) and National Consumer Credit Protection Amendment Regulations 2011 (No. 3).

[5]        Senator Nick Xenophon, Second Reading Speech, Senate Hansard, 21 June 2011, p. 33.

[6]        Mr Cameron Clyne, Chief Executive Officer, National Australia Bank, Senate Economics References Committee Hansard, Inquiry into competition in the Australian banking sector, 13 December 2010, p. 63.

[7]        Redfern Legal Centre, Submission 2, Senate Economics Legislation Committee's inquiry into the Banking Amendment (Delivering Essential Financial Services for the Community) Bill 2010, p. 2.

[8]        Mr Jim Murphy, Executive Director, Markets Group, Department of the Treasury, Senate Economics References Committee Hansard, Inquiry into competition in the Australian banking sector, 13 December 2011, p. 34.

[9]        Consumer Action Law Centre, Submission 87, Senate Economics References Committee's inquiry into competition in the Australian banking sector, p 13.

[10]      The Hon. Wayne Swan MP, Deputy Prime Minister and Treasurer, 'Interview with David Speers, Sky News Channel', Transcript, 21 June 2011, www.treasurer.gov.au/DisplayDocs.aspx?doc=transcripts/2011/089.htm&pageID=004&min=wms&Year=&DocType=2 (accessed 20 July 2011).

[11]      Mr Steven Münchenberg, Australian Bankers' Association, Senate Economics References Committee Hansard, Inquiry into competition in the Australian banking sector, 14 December 2010, p 83.

[12]      Australian Prudential Regulation Authority, Answers to questions on notice, Senate Economics References Committee's inquiry into competition in the Australian banking sector, 31 January 2011, p 3.

[13]      Australian Finance Group, 'Exposure Draft – National Consumer Credit Protection Amendment Regulations 2011', Submission to Treasury consultation, 1 March 2011, www.treasury.gov.au/documents/1984/PDF/Australian_Finance_Group.pdf (accessed 20 July 2011).

[14]      Mortgage and Finance Association of Australia, Submission 1, p. 4.

[15]      Mortgage and Finance Association of Australia, Submission 1, pp. 5-6 (footnotes omitted).

[16]      Prudential matters are defined in the Banking Act as the conduct by an ADI, an authorised non‑operating holding company (NOHC), a relevant group of bodies corporate, or a particular member or members of such a group, of any part of its or their affairs in such a way as: (i) to keep the ADI, NOHC, group or member or members of the group in a sound financial position; or (ii) not to cause or promote instability in the Australian financial system; or (iii) not to cause or promote instability in the New Zealand financial system; or (b) the conduct by an ADI, an authorised NOHC, a relevant group of bodies corporate, or a particular member or members of such a group, of its or their affairs with integrity, prudence and professional skill.

[17]      See item 2 of Schedule 2 to the Bill.

[18]      Mr Cameron Clyne, Chief Executive Officer, National Australia Bank, Senate Economics References Committee Hansard, Inquiry into competition in the Australian banking sector, 13 December 2011, p. 72.

[19]      Senate Economics References Committee, Inquiry into competition in the Australian banking sector, May 2011, p. 110.

[20]      Australian Bankers' Association, Submission 3, p. 6.

[21]      Australian Bankers' Association, Submission 3, p. 2.

[22]      Senate Economics References Committee, Inquiry into competition in the Australian banking sector, May 2011, p. 213.

[23]      Proposed subsection 9AF(4) of the Banking Act.

[24]      Mr David Lewis, General Manager, Supervision Framework, Australian Prudential Regulatory Authority, 'Financial Claims Compensation Scheme: Overview', Address to the Liquidity Risk Management Conference, 4 May 2007, www.apra.gov.au/Policy/upload/8e-David-Lewis-Financial-Claims-Compensation-Scheme.pdf (accessed 13 July 2011).

[25]      Professor Milind Sathye, Submission 2, p. 4.

[26]      Austrade, Australia's Banking Industry, May 2011, p. 9.

[27]      Australian Competition and Consumer Commission, Merger Guidelines, November 2008, p. 38.

[28]      US Department of Justice and Federal Trade Commission, Horizontal Merger Guidelines, 19 August 2010, p. 17.

[29]      Other brands operated by the major banks would also be captured (for example the St George brand operated by Westpac).

[30]      Australian Bankers' Association, Submission 3, p. 7.

[31]      Professor Milind Sathye, Submission 2, p. 4.

[32]      Mr Jim Murphy, Executive Director, Markets Group, Department of the Treasury, Senate Economics References Committee Hansard, Inquiry into competition in the Australian banking sector, 9 March 2011, p 18.

[33]      Mr Kim Cannon, Managing Director, FirstMac, Senate Economics References Committee Hansard, Inquiry into competition in the Australian banking sector, 4 March 2011, p. 25.

[34]      Australian Bankers' Association, Submission 3, p. 2.

[35]      Mortgage and Finance Association of Australia, Submission 1, p. 9 (footnotes omitted).

[36]      Mortgage and Finance Association of Australia, Submission 1, p. 9.

[37]      Mortgage and Finance Association of Australia, Submission 1, p. 9.

[38]      The Essential Financial Services for the Community) Bill 2010, a private senator's bill introduced in 2010 by Senator Bob Brown, also proposed to require APRA to amend section 9 authorities to give effect to the matters proposed in that bill.  While the bill was referred to the committee for inquiry, the 2010 Federal Election intervened and the bill lapsed. Again, none of the nine submissions explicitly objected to the principle of conditions being made to section 9 authorities beyond prudential matters.

[39]      Australian Bankers' Association, Submission 3, p. 6.

[40]      Australian Securities and Investments Commission Act 2001, s. 1.

[41]      The Banking Amendment (Delivering Essential Financial Services) Bill 2010 proposes to introduce sections 9AA–9AC, the Banking Amendment (Controls on Variable Interest Rate Changes) Bill 2010 proposes to introduce sections 9AD and the Banking and Consumer Credit Protection Amendment (Mobility and Flexibility) Bill 2011 proposes to introduce sections 9AG and 9AH. Even if all these bills were to pass, inconsistent numbering could still result as there does not appear to be a current bill which proposes to introduce a section 9AE.

Chapter 4 - Possible conflict and uncertainty between Schedule 2 and other laws

[1]        The amending regulations were the National Consumer Credit Protection Amendment Regulations 2011 (No. 2) and the National Consumer Credit Protection Amendment Regulations 2011 (No. 3). These were made on 23 March 2011.

[2]        National Credit Code, s. 6(13).

[3]        Explanatory Statement, Select Legislative Instrument 2011 No. 40.

[4]        National Consumer Credit Protection Regulations 2010, paragraph 79A(1)(c).

[5]        National Consumer Credit Protection Regulations 2010, r. 79A(4).

[6]        Australian Bankers' Association, Submission 3, p. 7.

Chapter 5 - Committee view and recommendations

[1]        Senator Nick Xenophon, Second Reading Speech, Senate Hansard, 21 June 2011, p. 33.