who has read the draft legislation?

Well last week certainly demonstrated to me that being a shareholder in Cash Converters is not for the faith hearted.

Thank you to all those that headed for the exit, you created a buying opportunity for me that only comes around every couple of years. I am sure over the coming months as the share price recovers that I will be eternally grateful to you.

Can I ask the question of the sellers, how many read Bill Shortens media release without reading the draft legislation? Politicians are all about spin, you need to read the fine print.

I found these comforting words in the drafts. In relation to loans under $2000, there are three types of fees permitted.

1 a fee or charge (a permitted establishment fee) that reflects the credit providers reasonable costs of determining the application for credit and the initial administrative costs of providing the credit under the contract;

2 a fee or charge (a permitted monthly fee) that is payable on a monthly basis starting on the day the contract is entered into;

3 a fee or charge that is payable in the event of a default in payment under the contract.

Hold the phone, hang on, 3 looks interesting, a reading of the notes show that default fees are capped by specifying that the total amount that can be recovered under a contract on default is 200% of the credit received by the consumer. (Did I just read 200%) This will mean that the total of the permitted establishment and monthly fees and the default fees can only be equal to this amount.

The rate at which default fees would accrue is not specified, as this would be regulated by common law principles (there words, not mine).

As a payday lender, what would stop me borrowing $100 with a ten dollar establishment fee requiring the loan to be repaid the next day (Tuesday), surely I could charge a default fee of $25 dollars and automatically allow an extension for a month and do a direct debit then. I imagine the average punter needs a loan for more than one day.

Yes, some might think I would be bound by responsible lending, how responsible is this legislation. What would the High Court make of it?

It�s a shame that payday lenders will have to revert to trickery to stay in the business. The government has the perfect opportunity to strike a good balance, it looks like they have blown it. You can drive a truck through this proposed legislation, perhaps it was intended that way. Appear to be tough and doing something without changing anything. You be the judge.

In relation to the Ezcorp offer, once the documents get lodged in the court on 1 September 2011, its going to be hard for them to pull out. Could you imagine trying to change the terms and conditions of the offer after it has been submitted to the court. Very exciting week coming up. For those that exited, good luck, Cashies certainly was not for you.

Seek your own advice, I am half crazy.