Addressing a problem in many parts of the world St Vincent de Paul Society Chief Executive, Dr John Falzon said that genuine payday lending reform was a good opportunity for the government to take the side of the true battlers instead of the ‘vested interests’, a phrase recently used by the Treasurer Wayne Swan to criticise those who undermine economic fairness.
“Significant payday lending reforms will offer some protection to the people who are vulnerable to unscrupulous lending practices,” Dr Falzon said.
“As a bare minimum, we support reforms that limit lenders to charging an upfront fee of 10% of the loan, plus a monthly fee of 2% of the balance outstanding.
“Before it finalises the details of the reforms, we urge the government not to pander to the wishes of vested interests in the sector, who are pushing for an upfront fee of 20% of the loan, plus a monthly fee of 4%.
“Paying back a principal of $300 plus a fee of $72 over a fortnight, which is what would happen if the Cash Converters model was accepted, will leave a battler in far more trouble than when they took out the loan; potentially driving them back to the lender for another loan and the beginning of a
“In the name of the people who have been pushed out and punished for far too long, we call on the government to adopt the strictest payday lending reforms possible, to make sure people doing it tough get a fairer go.
Tags: Advocacy, Change, Systemic change