MNY's clients don't really have mortages, and pay a premium for lower lending standards so they can get a car or a longer term personla loan (MACC). Interesting that while mainstream lenders are squeezing out marginal borrowers the potential Labor gov would move against non bank lenders. Credit squeeze much?
There is already proposed legislation, delayed by the coalition, to limit consumer leases and restrict SACC repayments to 10% of income. Labor will implement these changes anyway on election.
Plus existing regulation to limit number of SACC loans allowed per customer over former period, plus double checking the customer does not have existing payday loans at time of application. Thus significantly reducing instances of 'debt spirals'.
The sector went through a lot of scrutiny over 2 years ago, for example CCV paid back millions to customers it preyed on. MNY, on the other hand, was not involved in any enforcable action at that time.
It's interesting that it will look at debt services companies, however this is mostly about Afterpay style credit in my opinion. Perhaps also recomendations further tightening the screws on vetting customers to prevent 'debt spirals'.
AFR mentioned there is an ASIC review on Afterpay coming up in DEC and will likely involve intervention powers to make changes to business model, if needed. Plus all the scrutiny and equiries over 2 years ago into payday loans/ consumer lease sector, the question is why now, and why again?
It feels like another political move by Labor to keep public narative on business misconduct and tap popularity of RC. When a few nasty stories come out from this, Labor can ask again and again what is the Coalition doing about it.
By the way, the press release states they are forming the enquiry because it was not covered by the RC. Presumably, the payday and lease sector was left out of the terms of the RC because it was all done 2 years ago! Who would have thought?
The Senate press release states that the equiry is to report by Feb 22 next year. (Check out the Twitter Accounts of the Fairfax journalists for the press releases.)
In any event, with MNY an auto lender within mainstream lending interest caps and already heavily regulated, what is likely to be the fallout here? SACC business is being phased out/run off, it just seems all very irrational to reduce the value of the business by 15%.
