The Financial Rights Legal Centre (Financial Rights) and Consumer Action Law Centre (Consumer Action) welcome ASIC’s planned intervention in the short term credit market and in particular the business models of Cigno Pty Ltd (Cigno) and Gold-Silver Standard Finance Pty Ltd (GSSF).
We strongly support ASIC intervening by way of legislative intervention. We support ASIC prohibiting short term credit providers and their associates from providing short term credit and collateral services, except in accordance with a condition which limits the total fees that can be changed in line with subsection 6(1) of the National Credit Code (NCC). Such an intervention will address the significant detriment identified by ASIC in the current model and address the fact that regulation 50A in the National Consumer Credit Protection Regulations 2010 (the Regulations) are not capturing the Cigno model.
The following information is submitted to assist ASIC in determining appropriate regulatory action as proposed.
