Published Monday, 14 July, 2008 at 10:03 AM
Attorney-General and Minister for Justice and Minister Assisting the Premier in Western Queensland
The Honourable Kerry Shine
48% Rate Cap To Be Introduced on July 31st
The Bligh Government’s interest rate cap of 48% inclusive of interest, fees and charges will commence at the end of this month, Attorney-General and Minister for Justice Kerry Shine announced today.
“Lenders must comply with the new interest cap which will take effect on July 31st,” Mr Shine said.
“From that date any loans issued in Queensland will be subject to the 48% cap, additionally after 31st July, if the terms of an existing contract change it too will have to comply with the new legislation.
“We have introduced this rate cap inclusive of interest, fees and charges to help protect vulnerable consumer who have been subject to some extraordinary interest rates of up to 1600%, particularly from pay day lenders.”
Mr Shine said the new cap would provide consumers with protection and assist them to get off the credit merry-go-round.
“I have been told of some cases where people have borrowed smaller amounts of money only to be crippled by the debt caused by excessive interest rates.”
“This rate cap will provide those borrowers with some certainty and give them a better chance of paying their loans.”
“It’s important to note the rate cap will cover all Queenslanders even if they borrow money from an interstate lender.”
Mr Shine said the Bligh Government has already announced it is funding an expansion of Queensland’s No Interest Loans Scheme to assist vulnerable consumers in accessing money for essential items.
“We’ve committed $1.2 million over the next two years to help the Good Shepherd Youth and Family Service work with community groups throughout the state to help distribute the loans, which have been made available through a $1.9 million grants from the National Australia Bank.”
“These loans will be provided to people in need to buy essential items like fridges, but won’t be available for luxury items.
Mr Shine said lenders have been given plenty of warning about the implementation of the rate cap and any provider caught entering into a contract that breaches the cap could be faced with civil penalties of up to $500,000.
Media Contact: Troy Davies 3239 6400 or 0488 799 273
“Lenders must comply with the new interest cap which will take effect on July 31st,” Mr Shine said.
“From that date any loans issued in Queensland will be subject to the 48% cap, additionally after 31st July, if the terms of an existing contract change it too will have to comply with the new legislation.
“We have introduced this rate cap inclusive of interest, fees and charges to help protect vulnerable consumer who have been subject to some extraordinary interest rates of up to 1600%, particularly from pay day lenders.”
Mr Shine said the new cap would provide consumers with protection and assist them to get off the credit merry-go-round.
“I have been told of some cases where people have borrowed smaller amounts of money only to be crippled by the debt caused by excessive interest rates.”
“This rate cap will provide those borrowers with some certainty and give them a better chance of paying their loans.”
“It’s important to note the rate cap will cover all Queenslanders even if they borrow money from an interstate lender.”
Mr Shine said the Bligh Government has already announced it is funding an expansion of Queensland’s No Interest Loans Scheme to assist vulnerable consumers in accessing money for essential items.
“We’ve committed $1.2 million over the next two years to help the Good Shepherd Youth and Family Service work with community groups throughout the state to help distribute the loans, which have been made available through a $1.9 million grants from the National Australia Bank.”
“These loans will be provided to people in need to buy essential items like fridges, but won’t be available for luxury items.
Mr Shine said lenders have been given plenty of warning about the implementation of the rate cap and any provider caught entering into a contract that breaches the cap could be faced with civil penalties of up to $500,000.
Media Contact: Troy Davies 3239 6400 or 0488 799 273