Banking (restricted word or expression) determination No. 1 of 2025 – Credit Co-operative

EXPLANATORY STATEMENT

Prepared by the Australian Prudential Regulation Authority (APRA)

Banking Act 1959, subsection 66(5)

Acts Interpretation Act 1901, section 33

Under subsection 66(5) of the Banking Act 1959 (the Act), APRA has the power to determine that a specified word or expression is to be a restricted word or expression for the purposes of section 66 of the Act. Subsection 33(3) of the Acts Interpretation Act 1901 confers power to revoke an instrument made under an enactment.

On 12 September 2025, APRA made Banking (restricted word or expression) determination No. 1 of 2025 – Credit Co-operative (the Instrument), which:

• under subsection 66(5) of the Act and subsection 33(3) of the Acts Interpretation Act 1901, revokes Banking (restricted word or expression) determination No. 1 of 2015 made on 6 August 2015 (2015 Determination), which determined the expression ‘credit co-operative’ to be a restricted expression for the purposes of section 66 of the Act; and
• under subsection 66(5) of the Act, determines the expression ‘credit co-operative’ to be a restricted expression for the purposes of section 66 of the Act.

The Instrument commences on the day that it is registered on the Federal Register of Legislation (FRL).

1.             Background

Under section 66 of the Act, it is an offence for a person to use or assume in Australia a restricted word or expression in relation to that person’s financial business. The meaning of ‘restricted word or expression’ is given in subsection 66(4) of the Act.

The 2015 Determination determined the expression ‘credit co-operative’ to be a restricted expression for the purposes of section 66 of the Act.

The 2015 Determination would have been repealed on 1 October 2025 by operation of section 50 of the Legislation Act 2003. Under subsection 50(1) of the Legislation Act 2003, a legislative instrument registered after 1 January 2005 will sunset on the first 1 April or 1 October falling on or after the tenth anniversary of the registration of the instrument on the FRL.

2.             Purpose and Operation

The purpose of the Instrument is to revoke the 2015 Determination and replace it with a new instrument without any amendment.  The Instrument determines that the expression ‘credit co-operative’ continues to be a restricted expression for the purposes of section 66 of the Act.

APRA conducted an assessment of the effectiveness and efficacy of continuing the 2015 Determination and concluded that it was appropriate that it be remade without amendment.

Documents incorporated by reference

Under paragraph 14(1)(a) of the Legislation Act 2003, the Instrument incorporates by reference the Act as in force from time to time.

The Act may be freely obtained on the Federal Register of Legislation at www.legislation.gov.au.

3.             Consultation

On 18 June 2025, APRA released a consultation letter requesting feedback from industry on a set of minor updates to APRA’s exemptions and determinations under section 66 of the Act, including the reissue of the 2015 Determination without change.[1] During the consultation period, APRA received two submissions that commented on the 2015 Determination proposal, with both supporting the reissuing of the 2015 Determination without change. One of the submissions was made by an industry association representing customer-owned banking institutions.

APRA is satisfied the consultation was appropriate and reasonably practicable.

4.             Impact Analysis (IA)

The Office of Impact Analysis confirmed that a Regulation Impact Statement was not required.

5.             Statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

A Statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is provided at Attachment A to the Explanatory Statement.

ATTACHMENT A

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Banking (restricted word or expression) determination No. 1 of 2025 – Credit Co-operative (the Instrument)

This Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (HRPS Act).

Overview of the Legislative Instrument

Under section 66 of the Banking Act 1959 (the Act), it is an offence for a person to assume or use a restricted word or expression in Australia in relation to that person’s financial business.

Under subsection 66(5) of the Act, APRA has the power to determine that a specified word or expression is to be a restricted word or expression for the purposes of section 66 of the Act.The Instrument revokes Banking (restricted word or expression) determination No. 1 of 2015 and replaces it with a new instrument without any amendment.  The Instrument determines that the expression ‘credit co-operative’ continues to be a restricted expression for the purposes of section 66 of the Act.

Human rights implications

APRA has assessed the Instrument and is of the view that it may impose a potential, albeit minor, limitation on the freedom of expression, specifically the right to commercial expression, recognised or declared in the international instruments listed in section 3 of the HRPS Act.

The Instrument is accessible to the public on the Commonwealth of Australia Gazette, allowing the public to understand the restriction they will need to comply with.

The objective of the Instrument is to reduce the risk that the public is misled into believing that a non-APRA regulated financial business using the expression ‘credit co-operative’ is an authorised deposit-taking institution. APRA assessed the Instrument as being effective in achieving the objective sought and hence concluded that it was appropriate that it be remade without amendment.

APRA’s assessment is that any potential restriction on the right to commercial expression would be proportionate and commensurate to what is necessary to protect the public from confusion or harm. The Instrument applies a circumscribed restriction to a specific group of individuals, and is subject to a sunsetting date, in accordance with the Legislation Act 2003, and therefore subject to future review. An individual seeking to use the restricted expression ‘credit co-operative' in relation to their financial business may apply to APRA for an exemption.

Conclusion

Accordingly, in APRA’s assessment, to the extent that the Instrument may impinge upon rights to commercial expression recognised or declared in the international instruments listed in section 3 of the HRPS Act, this Instrument is compatible with human rights.

[1] See: https://www.apra.gov.au/banking-act-exemptions-and-section-66-guidelines .