Document ID: chunk:federal_register_of_legislation:F2024C00134:reg:10
Version: federal_register_of_legislation:F2024C00134
Segment Type: reg
Provision Reference: reg 10
Character Range: 10911–13165

10  COVID-19 economic response—guarantee of lending to small and medium enterprises
 (1) It is an additional condition relating to the authorisation of the AFCA scheme that the AFCA scheme rules must include provisions consistent with subsections (2), (3), (4), (5) and (6) of this section.
 (2) Subsections (3) and (4) apply if:
 (a) a loan is made by a lender to a borrower and:
 (i) the loan is a SMEG Loan; or
 (ii) the lender believes in good faith that the loan is a SMEG Loan; and
 (b) the borrower makes a complaint to the AFCA scheme in accordance with the AFCA scheme rules in relation to any of the following:
 (i) the SMEG Loan;
 (ii) any other loan (to the extent that the loan is related to, or connected with, the SMEG Loan).
 (3) When considering the complaint, AFCA and the AFCA Decision Maker must not take into account any decision made by the lender which relates to:
 (a) a decision to provide the SMEG Loan to the borrower; or
 (b) the amount of the SMEG Loan.
 (4) In relation to decisions which AFCA and the AFCA Decision Maker can consider, they must consider the complaint on the basis that:
 (a) the lender was permitted to disregard the impact of COVID-19 when determining the financial situation of the borrower; and
 (b) the purpose of the SMEG Act is to encourage the quick and efficient provision of loans to borrowers as a response to the economic impact of COVID-19 on individuals, businesses and the Australian economy; and
 (c) the lender is required to comply with the terms of the SMEG Act (and any instruments, rules or conditions made as a consequence of that Act) in providing SMEG Loans to borrowers; and
 (d) the considerations in paragraphs (a) to (c) must be given priority by AFCA and the AFCA Decision Maker over other matters when making any preliminary assessment or determination.
 (5) The AFCA scheme must not consider systemic issues relating to SMEG Loans in relation to the decisions referred to in subsection (3), unless it becomes aware, in connection with a complaint under the AFCA scheme, that a serious contravention of a law may have occurred.
 (6) Any amendments to the AFCA scheme rules that are made as a result of this section must apply from the day after this instrument is registered.