Published Monday, 26 November, 2007 at 04:44 PM
JOINT STATEMENT
Attorney-General and Minister for Justice and Minister Assisting the Premier in Western Queensland
The Honourable Kerry Shine
Premier
The Honourable Anna Bligh
Bligh Government to Crack Down on Pay Day Lenders
The Bligh Government has rejected calls from payday lenders and will push ahead with plans to introduce a cap on pay day loans.
Ms Bligh said State Cabinet had approved the release of an exposure draft of the Consumer Credit (Queensland) Amendment Bill 2008 and the Consumer Credit (Queensland) Special Provisions Regulation 2008.
“We made a commitment to introduce a cap earlier this year and despite a sustained campaign by pay day lenders opposed to our proposal I can now confirm that cap will be set at 48% inclusive of interest, fees and charges,” Ms Bligh said.
“This legislation will prevent borrowers charging exorbitant interest rates on pay day loans and will help consumers get off the credit merry-go-round.
“The Government has been heavily lobbied by the pay day lending industry not to introduce this cap but we will be introducing this legislation to protect people from shonky loan sharks who prey on their financial situation.”
Ms Bligh said borrowers who use high-cost lenders are usually low income, disadvantaged or vulnerable consumers.
“We need to help these people and law reform is one of the best ways we can offer them protection,” she said.
Attorney-General and Minister for Justice Kerry Shine said the Department had received more than 5,000 submissions including many from customers of pay day lenders urging the Government not to introduce the cap.
“Pay day lenders have heavily lobbied the Government not to introduce a cap, claiming many borrowers will go out of business if a limit on interest, fees and charges was introduced,” Mr Shine said.
“I acknowledge they have concerns, however our priority is to protect consumers and stop them falling into a pay day credit trap.”
Mr Shine said the purpose of releasing the draft Bill and Regulation for comment was not to re-open discussion about the Government’s objective to introduce a cap of 48% for interest, fees and charges.
“We are releasing this draft legislation to provide stakeholders with an opportunity to comment on whether it adequately achieves our policy objective,” Mr Shine said.
Ms Bligh warned lenders the Government will not tolerate any borrowers who break the law once the 48% cap is introduced.
“There will be severe penalties for any lenders who charge interest, fees and charges above the set cap,” Ms Bligh said.
“Credit providers who charge above the legislated maximum will be required to pay back any amount over the cap and will face civil penalties of up to $500,000 for breaching the Consumer Credit Code.
“They will also face significant criminal penalties of $10,000 for individuals and $50,000 for corporations.”
Copies of the exposure drafts are available at www.justice.qld.gov.au or www. fairtrading.qld.gov.au
26 November, 2007
Further inquiries: Premiers Office (07) 3224 4500
Ms Bligh said State Cabinet had approved the release of an exposure draft of the Consumer Credit (Queensland) Amendment Bill 2008 and the Consumer Credit (Queensland) Special Provisions Regulation 2008.
“We made a commitment to introduce a cap earlier this year and despite a sustained campaign by pay day lenders opposed to our proposal I can now confirm that cap will be set at 48% inclusive of interest, fees and charges,” Ms Bligh said.
“This legislation will prevent borrowers charging exorbitant interest rates on pay day loans and will help consumers get off the credit merry-go-round.
“The Government has been heavily lobbied by the pay day lending industry not to introduce this cap but we will be introducing this legislation to protect people from shonky loan sharks who prey on their financial situation.”
Ms Bligh said borrowers who use high-cost lenders are usually low income, disadvantaged or vulnerable consumers.
“We need to help these people and law reform is one of the best ways we can offer them protection,” she said.
Attorney-General and Minister for Justice Kerry Shine said the Department had received more than 5,000 submissions including many from customers of pay day lenders urging the Government not to introduce the cap.
“Pay day lenders have heavily lobbied the Government not to introduce a cap, claiming many borrowers will go out of business if a limit on interest, fees and charges was introduced,” Mr Shine said.
“I acknowledge they have concerns, however our priority is to protect consumers and stop them falling into a pay day credit trap.”
Mr Shine said the purpose of releasing the draft Bill and Regulation for comment was not to re-open discussion about the Government’s objective to introduce a cap of 48% for interest, fees and charges.
“We are releasing this draft legislation to provide stakeholders with an opportunity to comment on whether it adequately achieves our policy objective,” Mr Shine said.
Ms Bligh warned lenders the Government will not tolerate any borrowers who break the law once the 48% cap is introduced.
“There will be severe penalties for any lenders who charge interest, fees and charges above the set cap,” Ms Bligh said.
“Credit providers who charge above the legislated maximum will be required to pay back any amount over the cap and will face civil penalties of up to $500,000 for breaching the Consumer Credit Code.
“They will also face significant criminal penalties of $10,000 for individuals and $50,000 for corporations.”
Copies of the exposure drafts are available at www.justice.qld.gov.au or www. fairtrading.qld.gov.au
26 November, 2007
Further inquiries: Premiers Office (07) 3224 4500