Westpac has today written to some of its Payday customers and have informed them that the bank has taken the decision to cease to provide banking and financial products and services to its customers who provide Short Term Credit Contracts (STCCs) or Small Amount Credit Contracts (SACCs) under section 5(1) of the National Consumer Credit Protection Act 2009 (cth).
According to a release from Cash Converters, the Company currently has a securitisation facility with Westpac drawn to $59m which is contracted to March 2016 with an approximate six month run-off period. Westpac also provides transactional banking services to the Company and have agreed to provide these services until the expiry date of the securitisation facility.
In a parallel announcement, Money3 Corporation Limited (‘Money3’) also received notice from Westpac of their intent to cease their banking relationship. The Westpac securitisation facility accessed by Money3 to fund the automotive business is currently drawn to approximately $10 million and Money3 says it has the capacity to repay the facility from existing cash flows. The existing facility has a 12 month run off period after December 2015. In addition to the $10million Westpac facility Money3 has in place a $30 million corporate bond facility that is unaffected by Westpac’s decision.
Westpac was the only major lender providing funding to the Payday sector and had been criticised for this by a number of stakeholders.
