Payday lenders have urged the Government to get a measure of the impact of responsible lending rules and other aspects of the national consumer credit regime before imposing more restrictions on their activities.The Parliamentary Joint Committee on Corporations and Financial Services is holding a public hearing in Canberra today to kick off its inquiry into proposed amendments to the National Consumer Credit Protection Act.The most controversial parts of the bill are an interest rate cap and other controls over the activities of payday lenders.The draft bill caps the costs that will apply to finance contracts of up to A$2000 that run for less than two years.Lenders will be limited to charging an upfront fee of 10 per cent of the total amount borrowed and two per cent each month for the life of the loan. Apart from fees payable in the event of a default, the lender cannot apply any other charges.For larger loans, a credit provider is prohibited from entering into a contract where the annual "cost rate" exceeds 48 per cent.Lenders will not be allowed to refinance contracts for small amounts. The aim is to stop debt rolling over and compounding.The lender will be required to inform consumers of other options, such as Centrelink advances, no-interest and low-interest loan schemes run by community organisations, and the availability of hardship programs run by credit providers and utilities.Payday lenders have drawn heavily in their submissions on a report prepared by a team at Queensland University of Technology, led by Stephen Corones, a professor in the Faculty of Law. The report, An Examination of the Regulation of Payday Lenders, which was published in March this year, concludes that there is insufficient evidence to say whether there is market failure in the payday lending industry that needs to be corrected by regulation.The report says: "Our review of the literature has shown that there has been no evaluation of interest rate caps as a regulatory response in the Australian jurisdictions which have seen them in comparison to those jurisdictions that have not."It says that the extent to which the problem of predatory lending has been resolved under the national consumer credit regime is untested.And it says there is a lack of any current reliable information on the costs of payday loans to the lenders. "This provides a significant impediment to regulating fees and interest charges."