A buy now, pay later credit provider will unable to charge a consumer more than $320 a year in the first year in fees, draft regulations published by Treasury provide.
In subsequent years the fee cap will be $245.
The Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 (BNPL Act) amended the Credit Act and the Credit Code to establish a regulatory framework for Low Cost Credit Contracts, and may include buy now, pay later (BNPL) contracts.
The BNPL Act amends the Credit Act and Credit Code to:
• ensure that LCCCs are a form of credit regulated under the Credit Act and extend the application of the Credit Code to cover LCCCs;
• require providers of LCCCs to hold and maintain an Australian credit licence and comply with the relevant licensing requirements and licensee obligations, with some modifications to ensure regulation is proportionate;
• establish a modified Responsible Lending Obligations framework, which LCCC licensees can elect to be subject to, that scales better with the risks posed to consumers, including requiring providers of LCCCs to develop and review a written policy on assessing whether the LCCC will be unsuitable for the consumer; and
• extend anti-avoidance protections to prevent providers of LCCCs from structuring their business models to avoid regulation.