Tiff over short-term loan

Cash Converters assistant manager Ebony Schultz outside the Musgrave Street office.
Cash Converters assistant manager Ebony Schultz outside the Musgrave Street office. Chris Ison

THE manager of Rockhampton's Cash Converters, Coral Green, fears proposed Gillard Government legislation will hurt some of Rockhampton's most financially vulnerable as well as cost jobs.

Cash Converters claims the government's proposal would see short-term loans wiped out - a point rejected by Member for Capricornia Kirsten Livermore yesterday.

The business has launched a campaign against the government's proposed amendments to the National Consumer Credit Protection Act in 10 Labor-held marginal electorates, including Capricornia.

Coral said over the years thousands of people had taken advantage of a short-term loan at Rockhampton's Cash Converters.

"This will have a huge impact for customers and our four staff," Coral said.

She said it would be unviable for Cash Converters to run its operation below cost.

Coral said the store's customers supported the company in its push to block the government.

"We have really good relationships with our customers," Coral said.

"On a daily basis (the number of people seeking a loan) depends, some days it might be 25, other days it might be 50," Coral said.

The company's cash advance policy is for every $100 borrowed over a four-week period there is a $35 broker fee.

Coral said for a $100 advance, customers would repay $136.02 once the interest had been added.

For a $200 loan, customers would repay $272.84.

Cash Converters placed a large advertisement in yesterday's Bulletin calling on Ms Livermore to consider the impact of the change.

But she isn't buying their argument.

Ms Livermore said that contrary to the claims made by Cash Converters, the government's proposal did not ban payday lenders or discourage their business.

She said rather, this legislation sought to protect vulnerable consumers from outrageous interest rates and provided additional security for consumers who accessed these services.

"There are many examples where ordinary people in a tough financial position require these services," Ms Livermore said

"This legislation provides a safety net for everyday Australians who use these services.

"We have all experienced a situation where you receive an unexpected bill or are placed in a situation where you need a little extra cash, for these circumstances there will continue to be short-term lending services for people to access, however now people can be assured a fair go when they access these services and security against exorbitant interest rates that can create a debt spiral to people already in financial hardship."

Topics:  cash converters federal government loans proposal rockhampton

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