New era of responsible lending begins

Vulnerable consumers are set to be better protected as the government’s new responsible lending rules come into force this week.

Friday, June 5th 2015, 6:42AM 1 Comment

by Miriam Bell

The Credit Contracts and Consumer Finance Amendment Act and its accompanying responsible lending code take effect from June 6.

Minister of Commerce and Consumer Affairs Paul Goldsmith said it was the start of a new era in consumer lending.

From Saturday on, all lenders must meet responsible lending obligations and all consumers must have access to better information to help them make better borrowing choices.

Goldsmith said the new legislation gives greater protection to consumers borrowing money and helps ensure they can afford to repay the money they are borrowing.
Under the new law:

Goldsmith said there will now be harsher penalties for lenders who don’t follow the rules, which will be enforced by the Commerce Commission.

“Our intention is not to impose unnecessary compliance costs on lenders who are already lending responsibly, but rather to provide additional protection from lenders who engage in predatory practices.”

Banking and mortgage sectors representatives have welcomed the new legislation  – although they have warned that regulators will need to be vigilant in enforcing it.

Tags: Responsible lending

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Comments from our readers

On 15 June 2015 at 2:06 pm whitewabbits said:
We have been wondering for years why New Zealander lending institutions will not allow debtors to repay their debt daily on a daily calculation not a monthly repayment calculation. In UK and Europe we experienced HSBC banking, that was repaid daily, not just calculated daily and repaid monthly.

I think this would assist debtors to repay creditors a lot faster. Poor creditors, I know, they will suffer. Creditors have been raking in the money for years now, let the debtors have an opportunity to reduce their debt and work towards the "have" minority. Why cant we repay our debt calculated interest daily?

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