Page 2248 - Week 07 - Thursday, 16 June 1994

MADAM SPEAKER, I NOW TURN TO THE DETAILS OF THE BILL

-CURRENTLY SECTION 30 OF THE A.C.T. CREDIT ACT RESTRICTS THE

OPERATION OF THE ACT TO CREDIT CONTRACTS WHERE THE ANNUAL

INTEREST RATE EXCEEDS 14% AND THE AMOUNT FINANCED IS $20,000 OR

LESS. DUE TO A SUBSTANTIAL DROP IN INTEREST RATES AND THE

EFFECTS OF INFLATION OVER TIME, MANY CONSUMERS ARE NOW

ENTERING INTO CREDIT CONTRACTS WHICH ARE NOT COVERED BY THE

ACT AND ARE ACCORDINGLY DENIED US PROTECTION. FOR INSTANCE IN

1984 A NEW CAR COULD BE PURCHASED FOR UNDER $20,000 AT AN

INTEREST RATE OVER AND ABOVE 14%. NOW MOST NEW CARS COST

MORE THAN $20,000 AND THE INTEREST RATE IS UNDER 14%.

UNDER SECTION 266 OF THE CREDIT ACT 1985 THE EXECUTIVE MAY

MAKE REGULATIONS THAT ARE NOT INCONSISTENT WITH THIS ACT,

PRESCRIBING ALL MATTERS WHICH ARE REQUIRED OR PERMITTED TO BE

PRESCRIBED OR WHICH ARE NECESSARY OR CONS TO BE PRESCRIBED

FOR CARRYING OUT OR GIVING EFFECT TO THIS ACT.

THE CREDIT (AMENDMENT) REGULATIONS 1994 WILL ENSURE THAT

CREDIT CONTRACTS WHOSE INTEREST RATE IS MORE THAN 8% AND

WHOSE MONETARY LIMIT IS NO GREATER THAN $30,000 ARE

PROTECTED.

THE SECOND NEW MEASURE, MADAM SPEAKER WILL BE TO

PRESCRIBE A CAP ON INTEREST RATES AT 30% FOR ALL CONSUMER

CREDIT LOANS. THIS MAY SEEM HIGH AGAINST TODAY'S RATES BUT

IT WAS NOT LONG AGO THAT A FINANCE COMPANY ACROSS THE

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