Payday Loans

13 May 2020

Senator GRIFF (South Australia) (15:43): I, and also on behalf of Senator McAllister, move:

That the Senate—

(a) notes that:

   (i) small amount credit contracts (SACCs), known as payday loans, are high-cost loans of up to $2000 for a period of 16 days to 12 months,

   (ii) payday lending is a billion dollar industry where profits are made by charging high fees to consumers, often entrenching them in a cycle of debt,

   (iii) given the current circumstances surrounding COVID-19 and the number of people facing financial hardship due to loss of income, there will likely be an increase in the amount of consumer debt as a result of payday loans,

   (iv) more than 30 consumer and community organisations have called for a ban on payday lending during the COVID-19 crisis,

   (v) the Federal Government has known for years about the harm payday loans can cause, and

   (vi) despite releasing Exposure Draft legislation on Small Amount Credit Contract and Consumer Lease Reforms in October 2017, the Federal Government has failed to take any further action;

(b) acknowledges that:

   (i) many Australians will need access to short-term finance during this crisis, and

   (ii) short-term loan options from banks may not be a viable option for Australians in desperate need of short-term finance during this crisis;

(c) condemns exploitative conduct and the exploitation of borrowers by unscrupulous lenders and affirms that:

   (i) there is no place for predatory lenders within the Australian community, and

   (ii) vulnerable consumers must be protected;

(d) further notes that:

   (i) the South Australian Government believes there has been an increase in predatory practices following the pandemic, and current laws are insufficient to prevent exploitation,

   (ii) the South Australian Attorney General has expressed frustration that the Federal Government could have acted by now but has not, and

   (iii) this failure by the Federal Government is forcing the South Australian Government to crack down independently; and

(e) calls on the Federal Government to urgently introduce and pass legislation to provide critical protections and stop the harm caused by payday loans and consumer leases. (general business notice of motion no.533)

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