Payday lender Cash Converters bounced back in the June half, after struggling in the first half of the financial year with the introduction of a tougher regulatory regime for small-amount short-term lenders.Net profit dropped more than 60 per cent in the six months to December but was up 44.9 per cent in the second half. Overall, revenue growth for the full year was up 21 per cent, while net profit finished down 26.4 per cent to at A$24.2 million.Under consumer credit amendments introduced last year, payday lenders must limit their interest rates and charges where a finance contract is worth up to $2000 and runs for less than two years. There is a limit of 20 per cent on any upfront charge and a limit of four per cent on monthly charges. Lenders will not be allowed to refinance small-amount contracts. The aim is to stop debt rolling over and compounding.For larger loans, a credit provider is prohibited from entering into a contract where the annual "cost rate" exceeds 48 per cent.Payday lenders must inform customers of other finance 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. Warnings must be provided on lenders' websites and in stores, and must be read during telephone discussions.They must also comply with tougher responsible lending rules, including reviewing clients' bank statements for the previous 90 days to verify their income.These changes dampened demand and increased administrative costs. Yesterday, Cash Converters reported that personal lending recovered in the June half, growing by 19 per cent. Part of the reason for this was that the company has implemented low cost online distribution, which has had strong take-up.The company said the rate caps in the new regulations had reduced margins.