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Broker thinks CCCFA enquiry will bring limited changes

There is likely to be some changes to the Credit Contracts and Consumer Finance Act (CCCFA) but one prominent player questions whether they will go far enough.

Wednesday, February 16th 2022, 1:12PM 2 Comments

by Eric Frykberg

Squirrel founder and chief executive John Bolton has been in the thick of the CCCFA debate with two petitions seeking change as well as having a meeting with Commerce Minister David Clark.

Bolton thinks there will be some changes coming out of the review into the Credit Contracts and Consumer Finance Act.

But the unanswered question is, will it be enough? And he says there is a good chance it won't be.

Bolton was among several mortgage professionals and lobbyists who met the minister last week, along with officials from the Ministry of Business, Innovation and Employment (MBIE).

He said the meeting went well, and Clark appeared to be well informed, and was across the issue.

But he had to balance the interests of vulnerable borrowers with the damage the law was causing elsewhere in the market.

“I don't know where he is going to land on it, I think we will see some changes coming through. The question will be, whether it is enough?”

Even though the meeting with Clark had MBIE officials present, Bolton was still interested in a further meeting with those officials where he would have more time to make his point.

“A meeting with the minister is great, but it tends to be a high-level conversation and quite rushed.

“You tend not to be able to sit in front of a minister of the Crown for very long, so you are rushing through it when you need to spend time to unpack the details and work out what changes need to be made.”

Bolton said he was an optimist and it was clear there had to be changes to a law which was not working. It was possible the law might only be tweaked or the changes might go further.

“At the very least, there will be much better examples used to improve interpretation of the law.

“To be honest, I think that would be too little … we are not talking of throwing it out, we are just thinking about getting it fit for purpose.”

However, as reported earlier ASB chief executive Vittoria Shortt is more optimistic about any changes. [READ ON]

« Mike Pero mortgages names new CEOClark's CCCFA clues »

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Comments from our readers

On 16 February 2022 at 1:52 pm Andy the adviser said:
The new CCCFA regulations shouldn't really change the way banks assess loans. They seem fair enough. There are two real issues we are faced with:
1. The banks have misinterpreted the intention and over-reacted massively. Banks have always had reasonable policies in the past, and so there should be no change. Look at the facts and the bigger picture, rather than trying to come up with a fool-proof calculation and algorithm. THAT is doomed to fail.
2. The inconsistencies in the calculations and collection of data. The aggregators and associations need to get together and come up with a unified and consistent debt servicing calculation and declaration form that can be shared by all advisers that is accepted by all banks. This would make life easier for customers, banks, and brokers, and would give the banks exactly the information they need.

The result would be happiness all around without having to do much to the CCCFA as it stands now.
On 17 February 2022 at 11:05 am Amused said:
The CCCFA changes illustrate what has become an alarming trend now in New Zealand i.e. the over regulation of industry and society as a whole. AML, Health and Safety and now the CCCFA are drowning the country in red tape adding cost and ultimately disadvantaging and inconveniencing consumers.

Government Ministries like MBIE have no experience whatsoever in lending money to borrowers and yet MBIE have been the key instigator in recommending these changes made to the CCCFA. If a customer previously approved by their bank for a home loan can no longer secure the same approval and their financial situation remains unchanged clearly the new regulations weren’t thought through properly and aren't fit for purpose.

MBIE appear to have an agenda in seeing as much regulation introduced as possible as it gives them something to do. As has been noted by a few opposition MPs recently it’s time New Zealand took stock of what some of these Government Ministries do all day and examine what value they are actually adding to the country. If financial advisers are supposed to exercise the care, diligence and skill with the advice that they give doesn’t the same apply to the officials at MBIE who have recommended these changes to the Act?

With MBIE involved in the enquiry process and making final recommendations to the Minister I would like to remain optimistic but unfortunately I think very little will change.

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Lender Flt 1yr 2yr 3yr
AIA 5.35 4.49 5.25 5.55
ANZ 5.54 5.15 5.85 6.15
ANZ Blueprint to Build 2.78 - - -
ANZ Special - 4.55 5.25 5.55
ASB Bank 5.35 4.49 5.25 5.55
Avanti Finance 5.45 - - -
Basecorp Finance 6.45 - - -
Bluestone 5.29 7.49 7.59 -
BNZ - Classic - 4.55 5.25 5.45
BNZ - Mortgage One 5.55 - - -
BNZ - Rapid Repay 5.55 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.55 5.35 5.94 5.99
BNZ - TotalMoney 5.55 - - -
CFML Loans ▲6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.70 5.20 -
Heartland Bank - Online 4.00 3.85 4.70 4.84
Heretaunga Building Society 5.95 4.80 5.50 -
HSBC Premier 5.49 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.25 4.29 5.09 5.35
Kainga Ora 5.43 4.57 5.58 5.85
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 5.00 5.55 6.19 6.39
Kiwibank - Offset 5.00 - - -
Kiwibank Special 5.00 4.55 5.19 5.39
Liberty 4.84 - - -
Nelson Building Society 5.95 4.95 5.85 -
Pepper Essential 3.44 - - -
Resimac 4.59 5.60 6.16 6.29
Lender Flt 1yr 2yr 3yr
SBS Bank 5.29 4.69 5.35 5.49
SBS Bank Special - 4.19 4.85 4.99
Select Home Loans 4.09 4.29 4.86 5.09
The Co-operative Bank - First Home Special - ▲4.19 - -
The Co-operative Bank - Owner Occ 5.45 ▲4.29 5.19 5.45
The Co-operative Bank - Standard 5.45 ▲4.79 5.69 5.95
TSB Bank 5.59 5.14 ▼5.79 6.15
TSB Special 4.79 4.34 ▼4.99 5.35
Unity 5.65 4.80 5.50 -
Wairarapa Building Society 5.24 4.55 5.20 -
Westpac 5.54 5.09 5.79 6.09
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.54 - - -
Westpac Special - 4.49 5.19 5.49
Median 5.45 4.55 5.25 5.52

Last updated: 19 May 2022 10:42am

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