Purpose and Role of Guidelines
The Standing Committee of Officials of Consumer Affairs (SCOCA) has endorsed a general framework for the consideration and development of guidelines under the Consumer Credit Code. The process for considering the same at present is outlined below under the heading "Objectives, Criteria and Process for Consumer Credit Code Guidelines".
As indicated, the guidelines process is intended to:
- help promote uniform and national interpretation of the meaning of the Code;
- facilitate clearer interpretation of the Code, where the application of provisions of the Code in particular circumstances require clarification.
These objectives are consistent with the recitals of the Australian Uniform Credit Laws Agreement 1993 which acknowledge that it is in the interests of ‘the public and of persons concerned with the administration of the [Consumer Credit] laws’...’that there should as far as possible be uniformity both in those laws and their administration in the States and Territories of Australia.’
A guideline is intended to represent the regulators’ view of what a specific section or sections of the Code means, in circumstances where it is considered that clarification is warranted having regard to the criteria outlined below.
Enabling the making of applications for guidelines may also provide a useful point of reference from which regulators’ can effectively consider a range of other approaches/mechanisms to address issues which have been raised. In certain circumstances, for example, where a guideline of the nature referred to in the criteria below may not be appropriate to address an identified problem, an agreed statement of enforcement policy may be considered as an alternative. In certain circumstances a statement of enforcement policy may be issued in addition to a guideline.
Consultation
Consultation comprises an essential part of the guidelines framework. To meet the initial criteria under Part B(1) below, applicants will have engaged in investigation and consultation to determine matters such as the relevance of the issue to stakeholders/the instance of various interpretations evident from conduct in the marketplace. The Uniform Consumer Credit Code Management Committee (UCCCMC) may also seek advice/engage in additional consultation in respect of the assessment process. In the event that a draft guideline is subsequently developed and endorsed by SCOCA, it will be made available to relevant stakeholders for comment prior to being submitted to SCOCA for final ratification.
Once SCOCA’s final ratification has been obtained, the guideline will be numbered sequentially. It is intended that a separate page containing any ratified guidelines will be included on this Web Site and that they be made available through other relevant forums such as peak bodies and financial publications.
Review of Guidelines
As detailed below, guidelines may have an indefinite life or, for example, be an interim measure pending any appropriate amendment to the Code. To ensure that guidelines remain relevant, each guideline will have a specific review date.
Development of a more formal framework for guidelines
It is intended that the guidelines framework be developed in two stages. The first stage will involve the development of guidelines within the framework below. This stage is operational from the beginning of 1998 until the development of the second stage.
The second stage is intended to give guidelines a more formal framework by seeking to incorporate them into the Code as extrinsic material or in some other form which courts and tribunals may use as formal guidance in decision making. The proposed second stage will require amendment to the Code and will require consultation with both Parliamentary Counsel and stakeholders to explore options and develop appropriate proposals.
Objectives, Criteria and Process for Consumer Credit Code Guidelines
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A: Objectives
- To help promote uniform and national interpretation of the meaning of the Code;
- To facilitate clearer interpretation of the Code, where the application of provisions of the Code in particular circumstances require clarification.
B: Criteria for Code Guidelines
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(1) |
The following initial criteria must be established before consideration can be given to the development of a guideline:-
- A request for clarification of a provision of the Code must be made by a significant sector of stakeholders or relate to an issue that has potential to affect a significant section of the marketplace; and
- There must be considerable uncertainty as to the application of the provision which may arise from legal debate or various interpretations evident from conduct in the marketplace; and
- There should exist in relation to a provision, a reasonable risk for a credit provider, intermediary, debtor or guarantor arising from such uncertainty.
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(2) |
Where the need for consideration of a guideline has been established, the following further matters should be considered:-
- Whether the provision requires clarification only or whether the Code may require amendment;
- If it is proposed to recommend amendment to the Code, whether it is considered that the objectives referred to above would be assisted by the development of a guideline in the meantime.
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(3) |
Where the need for a guideline has been established, the following matters are to be considered in the development of the guideline:-
- Guidelines should seek to clarify what is already contained in the Code having regard to the purpose/intention of the provision.
- Guidelines cannot expand upon the meaning of a provision to create an interpretation that would not be possible within the meaning of the provision.
- Guidelines are to have a prospective operation from the date they are expressed to come into effect.
- There should be regard to any potential disadvantage to any relevant class of stakeholder which may arise as a result of interpretation of provisions.
- Where it is anticipated that an amendment to the Code may be recommended, but it has been determined that a guideline may provide some assistance in the interim, the guideline can only deal with the existing law.
- Each guideline will have a specific review date.
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C: Process for the Development of a Guideline
- A request that consideration be given to development of a guideline must be submitted to the Uniform Consumer Credit Code Management Committee (UCCCMC) via the Chair of UCCCMC.
- UCCCMC will seek advice as appropriate on the intended meaning of the provision(s) and the relevant policy in relation to the provision.
- An assessment will be made by UCCCMC (after the obtaining of any further advice as considered appropriate by UCCCMC) as to whether a guideline is considered appropriate to address the issue raised in the request.
- Where it is considered appropriate to develop a guideline UCCCMC will develop a draft guideline having regard to the considerations outlined in B(3) above.
- Once a guideline has been developed by UCCCMC, a recommendation to this effect should be forwarded to the Standing Committee of Officials of Consumer Affairs (SCOCA) for endorsement.
- If endorsed by SCOCA the draft guideline should be distributed by UCCCMC to appropriate stakeholders for comment.
- The guideline, including any further changes made as a result of any consultative process, is to be submitted to SCOCA for final endorsement/ratification.
- Once SCOCA has endorsed/ratified a guideline, it is to report this action to the Ministerial Council on Consumer Affairs (MCCA).
- Where UCCCMC considers that the Code may require amendment in relation to the subject matter of the guideline request, the initial report to SCOCA should include drafting instructions to Parliamentary Counsel as part of the guideline recommendations.
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