57807 (2024). Arena Williams to the Minister of Commerce and Consumer Affairs

57807 (2024). Arena Williams to the Minister of Commerce and Consumer Affairs: Why is the Minister proposing to change the Credit Contracts and Consumer Finance Act so that directors and senior managers would no longer be personally liable for breaches of the Act?

Hon Andrew Bayly: Cabinet has agreed to remove the ‘due diligence’ duty of directors and senior managers found in section 59B of the Credit Contracts and Consumer Finance Act. The purpose of this duty would effectively be replaced by the proposed licensing model. Personal liability for directors and senior managers is currently attached to the duty, and therefore falls away once it is removed. These liability settings have been observed to contribute to excessively conservative decision-making by lenders. There will remain a number of ways directors and senior managers could be held liable (e.g. for pecuniary penalties) if they are personally involved in a breach of the Act.