The Australian Securities and Investment Commission
(ASIC) has flexed its muscles in relation to the
responsible lending regime and obtained a significant victory in
the Federal Court of Australia.
The judgment reinforces the importance of accurate and
complete record keeping by lenders.
The context
The case (
ASIC v The Cash Store Pty Ltd (in liq) [2014] FCA 926)
was largely resolved on its facts rather than through any statement
of legal principle but has a number of points of interest for those
considering the New Zealand legislation.
The Cash Store (TCS) ran a nationwide business offering
short term, low value payday loans on behalf of another company,
ASA, from which it was funded. The loans were for up to AUS$2,000
and TCS would lend up to between 35% and 50% of the customer's
next scheduled pay packet. Many customers had multiple or
overlapping loans.
