The Minister for Superannuation and Corporate Law, Nick Sherry released a draft of the new legislation designed to increase responsible lending to Australian consumers.This is good news! It is terrible we even need to worry, but the sad fact is online payday loans in Australia, have traditionally been plagued by schemes and scams. Here we are in trouble and needing emergency cash to get us through till the next payday, and we get taken advantage of in our desperation.
The new proposed law would try and increase responsible lending in two ways;
1. More accountability for lenders
This legislation will demand that only payday loan companies that are following responsible lending guidelines can get licensed and that unlicensed vendors would now be criminal. Short term loan companies that are in compliance will need to give more information up front. This will allow us, in our decision to get a cash advance to make a completely informed choice to loan and what the loan terms and fees actually consist of. This means no more hidden fees, charges or policies we are unaware of.
2. More stringent lending by the consumer
The new law would also require more information from us, the consumer. This would include credit checking. This is also good. We need to constantly be watching our financial and lending habits, and more accountability for the lender and borrower just helps us stay viable, and out of financial trouble.There is nothing wrong with needing a cash advance or emergency cash obviously. But realizing that the nature of payday loans are short term and not meant to solve long term financial trouble is important for our financial health.
So good on the Australia Government for trying to make online payday loans safer and scam free. All in all, the proposed laws are great for Australian consumers and for the payday loan industry in general.
