The Australian Securities and Investment Commission has given its support to the idea of having a mandatory database of small amount credit contracts, saying it would help improve compliance in the payday lending industry.ASIC's submission to the Government review of small amount credit contracts also calls for changes to the "presumption of unsuitability" rule and tougher anti-avoidance provisions.The Government has asked a review panel to consider the effectiveness of the provisions in the National Consumer Credit Protection Act that relate specifically to small amount credit contracts.These provisions include: •    A cap on fees and charges (a maximum 20 per cent establishment fee and a monthly fee of four per cent);•     A ban on credit contracts with terms of 15 days or less;•    A presumption that a loan is unsuitable if the borrower has held two other SACCs within the past 90 days or if the borrower is in default under another payday loan;•     A requirement to obtain and consider an applicant's bank account statements for the preceding 90 days;•     A requirement to advise consumers of the alternatives to SACCs;•    A requirement that consumers who default must not be charged an amount that exceeds twice the amount of the loan;•    Special protection that applies to people who receive 50 per cent or more of their income from Centrelink.The panel will look at whether there should be any further regulation of the sector or change to current regulation, whether the current sanction regime is working and the extent of avoidance practices in the industry.It will look at whether there should be a national database of SACCs to assist providers in assessing applicants.Small amount credit contracts are loans up to $2000 where the term is between 16 days and 12 months. Many of the borrowers who use them are excluded from other forms of personal finance and 25 per cent have income below the Henderson Poverty Line.ASIC estimates that the industry provided around 1.5 million loans worth more than $813 million in 2014/15. The average term of a loan is 50 days.ASIC's submission said the presumption of unsuitability rule did not appear to be working. "One option that appears to have merit is a requirement limiting the number of small amount loans (or the amount of credit under small amount loans) that can be obtained in a given period," ASIC said"Compliance among payday lenders is greater in relation to objective, clear requirements than it is to subjective obligations."It said a mandatory real-time database of payday loans would assist lenders to comply with such a requirement. A database would allow lenders to determine whether the prohibition would prevent them from providing a loan.ASIC recommended the enactment of a general anti-avoidance provision in the NCCP Act. "A rule that prohibits products or models that have the effect of avoiding some or all of the credit laws would assist our efforts to counteract avoidance and ensure that consumer receive appropriate protections," it said.It said there was scope for improvements to the current requirement