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Consumer Credit Bill in Australia Good News to Pawnbroker Cash Converters

By   /   August 30, 2012  /   No Comments

Recent legislation by the Australian federal government has put a cap on payday loans.  Pawn broker Cash Converters, who posted a record profit, expects the Consumer Credit Bill to give the company a competitive advantage over other lenders.  The Bill limits the fee for loans under $2,000 to 20 percent of the loan amount and will cap fees for loans between $2,000 and $5,000 to $400.  General Manager Ian Day said, “This legislation should provide Cash Converters with a competitive advantage in this market space and we expect that a number of small providers, who do not have adequate systems and standards in place to meet these provisions, will need to adapt or move out of the industry.”  Shortly after the news was released, shares in the company rose 6.12 percent.  The company expects “high levels of growth” over the next year.    Managing director Peter Cumins says, “We now have a resolution to the legislative uncertainty that has clouded a significant portion of our business for a very long time.  We can now act with greater certainty and confidence in investing in further growth.”

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