Lessors will be required to collect and consider 90 days of bank statements prior to providing a consumer with a consumer lease for household goods. The Bill will enable the Credit Regulations to implement a new 10 per cent protected earnings amount for consumer leases. Lessors of household will be required to disclose the base price of the goods and the difference between the total payments and the base price. Lessors will also be prohibited from undertaking door to door selling of consumer leases for household Comparison of key features of new law and current law New law Current law There is a cap on the cost of No equivalent provision. consumer leases. When verifying a consumer’s is a general obligation to take financial situation, lessors of reasonable steps to verify a household goods must obtain and consumer’s financial situation. consider 90 days of bank statements. There will be a specific regulation No equivalent provision. making power enabling the Credit Regulations to create a new protected earnings amount for consumer leases. Lessors of household goods are Credit providers (but not lessors) are prohibited from visiting a place of prohibited from visiting a place of residence for the purpose of inducing residence for the purpose of inducing a person who resides there to apply a person who resides there to apply for or obtain a lease, except by prior for or obtain credit, except by prior arrangement. arrangement. Lessors of household goods are Lessors are required to disclose the required to disclose the base price of total amount of rental payments under the goods being leased and the the lease. difference between the base price and the total repayments. Detailed explanation of new law Concept of lease for household goods’ ‘consumer The Bill introduces the concept of a lease for ‘consumer household goods’, defined as a consumer lease where any of the goods under the lease are goods’. [Schedule 1, items 1 and 64, the ‘household definition of lease for household goods’ in subsection 5(1) of ‘consumer the Credit Act and in subsection 204(1) of the Code]
Lessors will be required to collect and consider 90 days of bank statements prior to providing a consumer with a consumer lease for household goods. The Bill will enable the Credit Regulations to implement a new 10 per cent protected earnings amount for consumer leases. Lessors of household will be required to disclose the base price of the goods and the difference between the total payments and the base price. Lessors will also be prohibited from undertaking door to door selling of consumer leases for household Comparison of key features of new law and current law New law Current law There is a cap on the cost of consumer leases. No equivalent provision. When verifying a consumer’s financial situation, lessors of household goods must obtain and consider 90 days of bank statements. is a general obligation to take reasonable steps to verify a consumer’s financial situation. There will be a specific regulation making power enabling the Credit Regulations to create a new protected earnings amount for consumer leases. No equivalent provision. Lessors of household goods are prohibited from visiting a place of residence for the purpose of inducing a person who resides there to apply for or obtain a lease, except by prior arrangement. Credit providers (but not lessors) are prohibited from visiting a place of residence for the purpose of inducing a person who resides there to apply for or obtain credit, except by prior arrangement. Lessors of household goods are required to disclose the base price of the goods being leased and the difference between the base price and the total repayments. Lessors are required to disclose the total amount of rental payments under the lease. Detailed explanation of new law Concept of ‘consumer lease for household goods’ The Bill introduces the concept of a ‘consumer lease for household goods’, defined as a consumer lease where any of the goods under the lease are ‘household goods’. [Schedule 1, items 1 and 64, the definition of ‘consumer lease for household goods’ in subsection 5(1) of the Credit Act and in subsection 204(1) of the Code]
c2017-t229374-Explanatory-Memorandum-1.docx