Licensing of credit providers
Legal requirements for licensing of businesses providing credit
National credit reform
Responsibility for the regulation of consumer credit (including licensing or regulation of credit providers) is being transferred to the Commonwealth. It is currently proposed that this transfer will take place on 1 November 2009. The National credit reform page contains further information. This site will be updated as new information becomes available.
Credit Providers legal requirements
The Credit (Administration) Act 1984 sets out licensing requirements for businesses providing consumer credit and provides for disciplinary proceedings where a licensed credit provider engages in certain activities with a consumer, including dishonest or unfair conduct.
When you need a credit provider's licence
Anyone carrying out the business of providing credit regulated by the Consumer Credit (Western Australia) Code has to be licensed under the Credit (Administration) Act 1984, unless they are exempt under sub-section 7(1) of the Act. Exempt persons include banks and building societies.
You may need to seek independent legal advice as to whether you require a credit provider's licence.
Conducting business as a credit provider without the appropriate licence is an offence with a fine of up to $10,000.
What you need when applying for a credit provider's licence
The Credit (Administration) Act 1984 sets out the criteria that you must meet if you are applying for a credit provider's licence. Among other requirements, applicants must:
- have sufficient financial resources and expertise;
- be a 'fit and proper person' to hold a credit provider's licence; and
- be 'likely to carry on such a business honestly and fairly'.
If the Commissioner for Consumer Protection forms the view that an applicant fails to meet the licensing criteria, the application may be refused outright or granted subject to one or more special conditions. Applicants may apply to the State Administrative Tribunal for a review of the Commissioner's decision.
Lodging annual statements
Licensed credit providers must lodge an annual statement detailing the particulars of their business and any changes. The annual statement must be accompanied by payment of the prescribed annual fee.
Annual statements are due within one month of the anniversary of the date on which the licence was issued. When submitting an annual statement, individuals must provide additional documentation that confirms their ongoing fitness to continue to hold a credit provider's licence.
Failure to lodge the statement and/or pay the fee within the statutory timeframe will attract an additional charge for late payment and may result in cancellation of the licence.