tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, July 23rd, 7:18PM

News

rss
Latest Headlines

Harmoney changes fee structures

Harmoney is now charging a flat upfront fee of $375 to borrowers, replacing a percentage model that was being investigated by the Commerce Commission.

Friday, December 4th 2015, 6:00AM

by Susan Edmunds

It had been looking at Harmoney’s fees and how they fit within the Credit Contracts and Consumer Finance Act.

Under the act, lenders must only charge administration fees that directly relate to the cost of processing the loan.

But Harmoney and LendMe both charged percentage-based fees, which grow in size as borrowers' risk ratings decline.

Harmoney was charging 2% to 6% and LendMe 1% to 7%.

In many cases, that can range into thousands of dollars. LendMe deals with borrowing up to $2 million.

Squirrel charges set fees of $250 for an unsecured loan and $500 for a secured loan.

Harmoney had argued that its fees are not caught by the CCCFA because it is an intermediary, facilitating loans but not lending itself.

John Bolton, of Squirrel Money, said he did not buy the argument they were outside the Act.

He said whatever the Commerce Commission decided, something would probably have to change.

“There are two possible outcomes – either they will come to the opinion that Harmoney and LendMe are potentially in breach of the CCCFA and they will have to change their fee structures, or they will decide P2P and platform fees in particular fall outside of CCCFA.  The legislation is not well written and never foresaw this product.  While percentage based fees might end up within the law, I don’t believe it’s within the intention of the law and lawmakers will then need to change the legislation.  Long-term I don’t think there’s an easy way out for platforms charging percentage fees.  Either they will lose in the eye of the law, or the rules change to not allow performance-based fees.”

He said the same rules governing fees should apply to all lenders.  “It’s really important that the Commerce Commission makes a fast decision because the longer they leave it, the bigger the mess with more lenders coming into the market all the time.”

Marcus Morrison, of LendMe, said he believed his organisation was structured so it would be in line with what the Commerce Commission was looking for.  “[The fee] is paid by the borrower as a platform fee, it’s nothing to do with the credit transaction as such. It’s a fee from the borrower when a loan is [issued].”

Tags: Peer to Peer Lending Squirrel

« Brokers refer tricky clients to LendMeBolton: How do investors know P2P right for them? »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Underwriting delays for nib special offer
    “I have a significant objection to a point in this communication, and I have raised it with nib directly. "In future, please...”
    21 hours ago by JPHale
  • Cryptocurrency; Advisers wary but must evolve
    “Financial services getting into crypto right now has the typical feeling of the mum and dad investor jumping in. FOMO is...”
    2 days ago by JPHale
  • FMA report slams insurers
    “There's a gap, alright. However, the mainstream media has missed what Matthew pointed out here, the real impact on the consumer...”
    2 days ago by JPHale
  • FMA report slams insurers
    “@Murray If 95% of legitimate well established and capable business did not meet expectations, might the age old saying "they...”
    2 days ago by LNF
  • FMA report slams insurers
    “Meanwhile, in the real world, advisers are still trying to secure PI cover by the end of the month so they can remain in...”
    2 days ago by Adviser1
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.15 2.35 2.75
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.69 2.99 3.29
SBS Bank Special - 2.19 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▲2.29 - -
The Co-operative Bank - Owner Occ 4.40 ▲2.49 ▲2.89 ▲3.19
The Co-operative Bank - Standard 4.40 ▲2.99 ▲3.39 ▲3.69
TSB Bank 5.34 ▲3.30 ▲3.69 ▲4.04
TSB Special 4.54 ▲2.50 ▲2.89 ▲3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.68 2.99 3.29

Last updated: 19 July 2021 9:09am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com