We reported on ASIC’s scrutiny of the payday lending industry earlier this year and ASIC’s concerns have once more been voiced in their submission to the Independent Review of the Small Amount Credit laws. In ASIC’s 30 October 2015 Media Release and accompanying submission it has identified several potential improvements for the industry, including:
- the presumption of customers unsuitability, rather than ‘rebuttable presumptions’, limitations on the number of small loans obtainable in a given period and establishment of a real-time data base of payday loans to facilitate responsible lending practises;
- the enactment of anti-avoidance provisions in the National Consumer Credit Protection Act 2009 to protect consumers from business models aimed to avoid consumer credit obligations; and
- the imposition of consistent warning statements to combat misleading advertising.
The recommendations intend to curtail misconduct identified within the industry with particular focus on irresponsible lending, business models aimed to circumvent current laws and misleading advertising. With this submission ASIC continues to hone its sights in on payday lenders to protect financially vulnerable consumers while providing an efficacious business platform for lenders.
We will continue to monitor the outcome of the independent review.
Click here to read the ASIC media release and submission.
This blog was authored by DLA Piper Graduate Solicitor, Arndt Hermann.