NCPA Responds To The Age Article About Payday Loans

Nov 08 2016

NCPA Responds To The Age Article About Payday Loans

 MEDIA STATEMENT 08.11.16      

(The full media statement can be accessed as a pdf file at the bottom of this page.)

In response to the The Age article The ‘payday loan’ usury rolls on, shaved of a fractional fee, Tuesday 8 November 2016 by Michael Pascoe, BusinessDay contributing editor, the National Credit Providers Association (NCPA) – the peak industry body representing ASIC licensed small loan credit providers – would like to provide comment to a number of key areas.  

Incorrect reporting and loose use of language, intentionally or otherwise, is unhelpful to both consumers and in this case, ASIC licensed lenders who are incorrectly described as ‘payday lenders’.

The small loans industry, which has become incorrectly tarnished by the ‘payday loan’ label in Australia, is an important and viable option that provides consumers with a highly protected alternative to credit from the banks.

Since 2013, lenders who provide credit under the National Consumer Credit Protection Act now hold the SAME credit license as a bank, operate under the same regulator – ASIC, and have to meet higher Responsible Lending Obligations than a bank.

Further facts include: 1. In a bi-partisan amendment (the Amendment Enhancements Act) introduced in March 2013 to the National Consumer Credit Protection Act (Cth 2009), payday loans and hence, payday lenders were banned. 2. Any entity that exists today and holds an ASIC Australian Credit License, is but a shell by name only, of those former companies and practices, who operate today under the National Consumer Credit Protection Act – in 2016 with the same credit license as a bank.   3. Such was the quantum of consumer protection introduced in the NCCP Amendment Enhancement Act that it is legislatively harder since 1 July 2013 to provide consumer finance under $2,000 than just about any other type of consumer finance in Australia  

More information about Small and Medium Amount Credit Contacts, including consumer protections supplied under the National Consumer Credit Protection Act, can be accessed by these links:

1. Myths and facts about SACCs

2. General industry info about Small and Medium Amount Credit Contracts – Video 1  (2m30sec)

3. Consumer protections around Small Loans – Video 2  (3m28sec)

 
I encourage everyone to view this webpage which explains why Annual Percentage Rates (APRs) should be banned for loans under 12 months – specifically Small Amount Credit Contracts. This explains why APR’s of ‘hundreds of percent’ for such loans is wildly misleading.
NCPA and its members are committed to working with ASIC in an open and transparent manner to continue improving the performance of the industry and ensuring that where there are legitimate complaints, they are addressed quickly and in favour of the consumer.
To read the original article, visit: http://www.theage.com.au/business/banking-andfinance/the-payday-loan-usury-rolls-on-shaved-of-a-fractional-fee-20161107gsk3lm.html  
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For more media enquiries please contact Zadro:
Debbie Bradley, Group Account Director |02 9212 7867 | debbie@zadroagency.com.au  
Laura Valentine, Senior Account Manager |02 9212 7867 | laura@zadroagency.com.au