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Shorten gives some breathing room to payday lenders

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Australian Broker | 26 Apr 2012, 04:30 AM Agree 0
Financial Services Minister Bill Shorten has eased up on payday lenders with revisions to a bill regulating the industry
  • Michael Maher - Fair Go Finance | 01 May 2012, 03:29 PM Agree 0
    These draft changes are more sustainable. The original proposed legislation would have been catastrophic for the payday lender industry and have unintended consequences for consumers.
    A balanced outcome has been achieved due to the consultation process with the government and seems to benefit consumers in two ways - price cap and ongoing service providers.
    It would be detrimental to the consumer if this industry could not continue. As highlighted in the recent CBA study and media release: Australians borrow $1.6B from their nearest and dearest - mainly their mum on a monthly basis. The biggest contributor to this informal borrowing network is unforeseen or emergency purposes. This industry provides a valuable service to consumers who do not wish to use the option of family and friends. One point of warning to the government. Australia's strong economy coupled with the proposed level pricing structure and national framework may be appealing to offshore/overseas based online lenders as an attractive new market. Hopefully ASIC is prepared with appropriate compliance practices.
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