ASIC has released Consultation Paper 198 Review of the effectiveness of an online database for small amount lenders (CP 198) which seeks comment on whether an online database or similar system would be of assistance in determining whether consumers applying for a small amount loan have outstanding small amount debts and whether the contracts offered by the credit licensee are unsuitable.

The Consultation Paper seeks feedback on:

• whether it should be mandatory for credit licensees to register all small amount loans in a database and to make an inquiry from the database before entering into a new small amount loan;
• if a database of small amount loans is in place in Australia, what information should be recorded in it and made available to a small amount lender on enquiry; and
• whether there are other regulatory requirements that the database could be usefully and practically used to test proposed loan contracts against.

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