CCCFA enquiry inches forward

The team looking into the Credit Contracts and Consumer Finance Act (CCCFA) say they expect to have completed a draft report completed this week as scheduled.

Tuesday, February 15th 2022, 6:00AM 1 Comment

by Eric Frykberg

A final version is scheduled for mid-April. 

The inquiry was acceded to by the Minister of Commerce and Consumer Affairs David Clark, less than two months after the law came into effect.   
This followed a storm of protest that legislation which was supposed to target predatory lenders ended up treating practically everyone as a vulnerable borrower, and sometimes cut short their borrowing expectations.  
In addition, mountains of expensive paperwork were imposed on advisers.   
In announcing the inquiry, Clark at first said there would be no terms of reference. Then, the scale of the investigation grew, and terms of reference were announced after all.

These included looking at the intended and unintended consequences of the law, and considering the impact of external factors like the global economic situation.

The inquiry is under the auspices of the Council of Financial Regulators (COFR), which is a composite body made up of Treasury, MBIE, the Financial Markets Authority, Commerce Commission and the Reserve Bank. 
MBIE  is the organising body for the council and has been carrying out most of the research. 
So far the team has met bankers and their representatives, the Financial Services Federation, representing small lenders, and Financial Advice New Zealand, representing advisers.

Meanwhile, the Act Party is continuing to push for a separate investigation by Parliament's Finance and Expenditure Select Committee, after its leader David Seymour claimed MPs had not properly understood the bill when it went through last year.

The Party's Associate Finance Minister and committee member Damien Smith said he would push for this action at the committee's scheduled meeting next Wednesday.

“The Parliamentary Committee should not give up doing its job just because the Government has said it is holding an inquiry,” Smith said.

“The law is not working for consumers, lenders, or intermediaries such as brokers.”

Meanwhile the National Party says the blame stems more from MBIE's regulations passed under the Act than from the Act itself.

The party's revenue spokesperson Andrew Bayly said regulations cannot be considered by a parliamentary select committee.

So he has written to Clark wanting support for a new law, but was turned down.


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Comments from our readers

On 15 February 2022 at 9:46 am Amused said:
"Meanwhile the National Party says the blame stems more from MBIE's regulations passed under the Act than from the Act itself."

Finally the penny drops. MBIE as usual have over regulated another industry in New Zealand. Time for the whole ministry to be disbanded. The CCCFA law change was supposed to protect borrowers not disadvantage them!

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