MEDIA RELEASE - WILL MCCORMACK STARE DOWN THE PARLIAMENTARY FRIENDS OF PAYDAY LENDERS? - MONDAY, 26 FEBRUARY 2018

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WILL MCCORMACK STARE DOWN THE PARLIAMENTARY FRIENDS OF PAYDAY LENDERS?

Federal Labor today introduced a Private Member’s Bill to reform payday lending and rent-to-buy laws, known as the Small Amount Credit Contract (SACC) Reforms.

The Bill is an identical copy of draft legislation released by the newly minted Deputy Prime Minister when he was the Minister for Small Business in 2017. The Bill was approved by Cabinet, but later buried as a result of pressure from its own back bench.

If these reforms were good enough for Minister McCormack and the Coalition last year then they are surely good enough now.

McCormack published the draft bill implementing the recommendations of the SACC Review in October last year, and committed to introducing the bill into the Parliament before the end of 2017.

Since Mr McCormack published his draft bill last year a group of backbench Government MPs, known as the ‘Parliamentary Friends of Payday Lending’ has emerged seeking to bury the reforms.

The SACC reforms, which the Government committed to in November 2016 would:

·         impose a ceiling on the total payments that can be made under a rent-to-buy scheme;

·         require payday loans to have equal repayments and equal payment intervals;

·         remove the ability for SACC providers to charge monthly fees on residual term of a loan where a consumer fully repays the loan early;

·         ban unsolicited sales of the schemes; and

·         introduce broad anti-avoidance protections to prevent payday lenders and rent-to-buy companies from circumventing the rules;

Labor has consistently encouraged the Government to bring forward legislation to implement the reforms in the interests of improving protections for vulnerable consumers of payday loans and rent-to-buy schemes. 

Since the Government won’t introduce their own legislation, today Labor has done it for them.

McCormack must now demonstrate some leadership, stand up to his back bench colleagues and do the right thing by Australian consumers. 

 MONDAY, 26 FEBRUARY 2018