The payday lending industry, including Perth company Cash Converters, says more consultation with government is likely after leaders met with Assistant Treasurer Bill Shorten to thrash out reforms aiming to put predatory lenders out of business.
Industry lobby group, the National Financial Services Federation (NFSF), said it looked forward to further consultation with the government to achieve reforms that both protect vulnerable Australians and keep the industry viable for consumers that use short-term loans.
"We welcome regulation that protects disadvantaged Australians and keeps unlicensed and unscrupulous lenders from gaining a foothold in the market," NFSF chairman Mark Redmond said in a statement on Friday.
The meeting came a day after the government expressed disappointment over the industry's refusal to negotiate.
A spokesman for the Assistant Treasurer described the meeting as constructive.
"The Assistant Treasurer reiterated the Government's determination to end the practices of unscrupulous lenders who take advantage of vulnerable clients, and reform the payday lending sector."
The government intends to introduce legislation to parliament in the next sitting fortnight, he added.
The Assistant Treasurer unveiled draft legislation to reform the industry two weeks ago, which is designed to stop short-term lenders from overcharging vulnerable customers.
Payday lenders typically provide loans of between $200 and $2,000 that must be repaid within a short period of time, such as by the borrower's next payday.
Around half of customers have annual incomes below $24,000 and a quarter have incomes falling below the Henderson poverty line, according to a Treasury report released last Friday.
Borrowers usually have no access to other forms of credit, use the loan to meet basic living expenses and face interest rates from lenders of up to 48 per cent in NSW, Victoria, ACT, and Queensland.
Other states and territories have no interest rate cap.
If enacted, the reforms would set a national cap of 10 per cent on the up-front fee payday lenders can charge on loans, and a two per cent cap on the monthly fee they charge during the life of the loan.
The NFSF previously said the proposed cap is "unreasonably low" and would wipe out the industry.
Cash Converters' share price has fallen from about 75 cents to 50 cents over the past month, with the proposed regulations a major factor.
The proposed regulatons also caused Cash Converters major shareholder to pull out of an announced capital injection and joint venture expansion.
