I interpreted my view from the Announcement (pasted at end of...

I interpreted my view from the Announcement (pasted at end of this post), which view may be incorrect, but I doubt it, otherwise I would not hold it. The issue at hand is the intent of the legislation. Others may draw a different conclusion.

The intent of the 2015 legislation

The 2015 legislation disallowing loan roll-over was aimed at the practice of lenders indefinitely extending short-term loans that pushed so-called vulnerable people into debt spirals. However, the legislation was worded to cover loans of the type that CCP provided, so to obviate the trap of breaching the law via administrative error, CCP's policy was to extend the loan at no interest, because it collected more doing that than treating the loans as delinquent, and collecting on them as it does with PDLs, or selling the loans to debt collectors lower down the food chain.

Some debtors wanted to clear the debt, and could do so reasonably soon

Some delinquent debtors would come up with a story to the effect that if given leeway, they would and could pay the debt in full by some near-future absolute date, or a relative date like “when my insurance claim is paid”. In such cases, CCP would agree to extend the loan to the relevant date (a temporary repayment arrangement), but at a rate of interest (often lower than usual rate) to avoid the debtor deciding that it cost them nothing, or near-nothing, to drag the matter out. My oldest brother incurred a debt circa 1965 at a low interest rate, and he willingly let the debt compound for over fifty years. The lender (a friend who I knew well), died circa 2020 without ever being paid, and my brother, who had a considerable retirement income, might now be dead, or senile – we do not know, because he lived abroad, and never communicated with family for many years.

CCP discontinued temporary repayment arrangement in 2021

CCP decided to discontinue temporary repayment arrangements, and backdated remediation to the date it implemented that policy. ASIC contends that it should have backdated to 1 July 2015, when the legislation came into effect. Without wasting time pouring of the legalities of this, I cannot form an opinion if CCP is culpable or not, and Management too would rather pay the small amount that get into a legal joust with ASIC. But on legal jousts in this field, Judges have looked past the words in the legislation, and made their decisions on the intent of the legislation, which was to close a legal loop-hole used by loan sharks, not to address reasonable temporary repayment arrangement.

Extract of recent Announcement

For many years Credit Corp has maintained policies to avoid the establishment of payment arrangements of indefinite duration. The policy that CCP introduced mandated the application of forbearance to lower, or reduce to zero, any contractual interest rate to prevent initiating rollover arrangements. Credit Corp’s historic policy provided for a limited exception in circumstances where the arrangement was considered to be a temporary measure to moderate a customer’s liability in advance of either an increased repayment amount or a lump sum repayment (temporary repayment arrangement).

The Company amended its policy during 2021 and discontinued the practice of accepting temporary repayment arrangements. Interest forbearance was retrospectively applied from the date of commencement of all such arrangements in place at the time of the policy change to bring them intoconformance with the revised policy.

While Credit Corp is cooperating with ASIC’s investigation, it does not believe that the historic practice of accepting temporary arrangements was contrary to any law. Notwithstanding this, the Company has initiated a further process to retrospectively apply key elements of the revised policy to all temporary arrangements in place from 1 July 2015. It is not anticipated that this additional process will result in refunds, including interest thereon, in excess of $0.8 million.