Comment: taking a black-letter view to heart

Desperation and greed have long been an odd couple of bedfellows, as far as the payday lending industry is concerned.

It would be easy to brush off the settlement negotiated with Cash Converters as a hangover from an earlier time, now put behind us with the introduction of new financial planning and consumer lending rules over recent years.

To do that would be a mistake. This settlement is unlikely to change the unequal relationship that drives payday lending.

Look no further that the lack of remorse shown by Cash Converters, which runs pawn-broking businesses in 21 countries, and the comments from consumer rights advocates, who have warned that payday lenders continue to search for loopholes in the regulations - clearly the letter of the law is more valuable than its spirit: protecting the most vulnerable from falling deeper into debt is of no consequence when excessive profits are on offer.

That said, this latest result should serve as a reminder to the rest of the financial services sector that any departure from transparent and fair processes for whatever reason will not be viewed favourably by the regulators or the courts.

An inquiry into the pay day lending sector is being planned for later this year by Assistant Treasurer Josh Frydenberg. He's just been handed more ammunition.