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ASIC Halts City Finance Lending's Small Amount Credit Contracts

Examining the Impact of Regulatory Actions on Consumer Lending

ASIC Halts City Finance Lending's Small Amount Credit Contracts?w=400

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The Australian Securities and Investments Commission (ASIC) has recently issued an interim stop order against City Finance Lending Pty Ltd, preventing the company from issuing its small amount credit contracts (SACCs) to retail clients.
This action was taken due to deficiencies identified in the company's target market determination (TMD), raising concerns about the suitability of these products for consumers.

City Finance Lending's SACC product allows consumers to borrow up to $2,000 for personal purposes, such as unexpected expenses or discretionary spending. However, ASIC found that the TMD may fail to appropriately define the target market, including unclear definitions of acceptable income sources and insufficient criteria for assessing a consumer's financial capacity to repay the loan.

The interim order is valid for 21 days unless revoked earlier, during which time City Finance Lending is prohibited from offering these credit products. This measure aims to protect consumers from potentially unsuitable financial products that could lead to financial distress.

ASIC's action highlights the importance of clear and accurate target market determinations in the lending industry. Lenders are required to ensure that their products are suitable for the consumers they are targeting, taking into account their financial situations and needs. Failure to do so can result in regulatory intervention and penalties.

For consumers, this serves as a reminder to carefully assess the terms and conditions of any credit product before proceeding. Understanding the obligations of lenders and the protections in place can help individuals make informed decisions and avoid financial pitfalls.

It's advisable to explore all available options and seek financial advice if needed, especially when considering small amount credit contracts. Being aware of your rights and the responsibilities of lenders can empower you to make choices that align with your financial well-being.

Published:Thursday, 4th Jun 2026
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

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