According to the
Australian Treasury:
“On 28 November 2016 the Government released its response to the Review of the Small Amount Credit Contract laws.The Draft Bill implements the Government’s response to the Review.”
According to
the Australian Securities &
Investments Commission (ASIC) this bill has merit.
ASIC submission to government, November 2017:
2. We support the
financial inclusion objectives of the Exposure
Draft of the National Consumer Credit Protection Amendment (Small Amount Credit
Contract and Consumer Lease Reforms) Bill 2017 (the Bill). The consumer
harms that can be associated with payday loans and consumer leases are a
longstanding and systemic feature of these sectors and often fall on
financially vulnerable and disadvantaged consumers. We consider that the Bill
will provide an effective suite of protections commensurable to the risk of
harm to consumers from these products, balanced against the need to ensure that
the industry can remain viable.
3 In particular, we
support the level of the cap on costs for consumer leases proposed in the Bill.
We expect a cap set at this level will address the excessive costs some lessors
charge consumers, while still allowing a viable and sustainable consumer lease
sector.
4 We also support the
introduction of the Bill’s comprehensive anti-avoidance regime, which will
benefit both consumers and compliant businesses. These measures will be
essential to address the increased risk of avoidance activity following the
introduction of the reforms.
Yet this is the response from Liberal Party backbenchers.........
IRATE backbenchers have
revolted over Financial Services Minister Kelly O’Dwyer’s tough payday lending draft
laws and have successfully enlisted Treasurer Scott Morrison to reverse
Cabinet’s support of the Bill.
As the Turnbull
Government desperately searches for a circuit breaker from Barnaby Joyce’s sex
scandal, frustrations have spilt over against Ms O’Dwyer’s original handling of
new laws targeting payday lenders and rent-to-buy businesses, with backbenchers
complaining to the Prime Minister.
A bloc of about 20
backbenchers, including several in Queensland, are warning Ms O’Dwyer’s reforms
will send some businesses broke and are an affront to Liberal values.
In a move that will be
pilloried by consumer groups angry over rent-to-buy lenders charging up to 800
per cent interest, a group of MPs, labelled by some in the Government as the
“Parliamentary Friends of Payday Lenders” – a title that is angering the bloc –
has convinced Mr Morrison to retreat on parts of the draft laws.
It would be an
embarrassing move for Cabinet, which ticked off on the reforms last year.
