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: Monday, May 16th, 7:04PM

Mortgages

rss
Latest Headlines

Clark's CCCFA clues

The Minister of Commerce David Clark has given some hints as to how the much criticised Credit Contracts and Consumer Finance Act might be changed  - but also defended the legislation.

Thursday, February 17th 2022, 12:30PM 2 Comments

by Eric Frykberg

The law has been widely criticised for loading expensive paperwork onto lenders and imposing prescriptive rules that prevent brokers with years of experience from applying their expertise to each particular borrower.

The law was put under review less than two months after it came into effect after a storm of protest.

Clark has now given some clues about the sort of changes that might come about when the process is done in April.

He was speaking to a conference of the Financial Services Council, and mentioned things that he doesn't like which are included in an assessment of expenses when a person is seeking a loan.

“Some of the ways in which things are counted as expenses, like savings, just don't feel right at an intuitive level to me, so I want to pick through that carefully,” Clark said.

“And I do want to make some 'no regrets' changes sooner rather than later.”

Clark went on to defend the way in which the CCCFA had been developed, despite intense criticism of that process.

“Everybody signed up to this, all the parties in parliament signed up, and supported the intent of the legislation and so did the banks.

“Everybody wants it to work, so it is important to me that it does work as intended.”

And Clark went on to suggest that some of the stories alleging borrowing difficulties for customers were not caused by the CCCFA at all.
They stemmed from people having low deposits and getting caught up in LVR restrictions imposed by the Reserve Bank.

A drop in borrowing could also stem from seasonal factors rather than the CCCFA.

“We have got to work out what is the intended effect (of the law) because any borrower can become vulnerable if their life circumstances change and they have taken on debt that is not affordable – that is the lending we want to stop.”

Financial experts spoken to after Clark's address were unsure what he meant by the term, 'no regrets'.

It could have meant that he wanted both sides to a contract to be happy when it is signed and not bring up resentments later.

On the other hand, it could mean that CCCFA changes brought in after the review are agreed on by everyone and do not lead on to further political controversy later.

« Broker thinks CCCFA enquiry will bring limited changesPeople pay off mortgages earlier – Westpac »

Special Offers

Comments from our readers

On 17 February 2022 at 2:50 pm Amused said:
“Some of the ways in which things are counted as expenses, like savings, just don't feel right at an intuitive level to me, so I want to pick through that carefully,” Clark said.

This could almost be considered funny if it wasn't so sad. I presume then Minister that the officials at MBIE who recommended customer savings be included as expenses will be reprimanded now? Respectfully you and MBIE refused to heed the advice of seasoned practitioners who forewarned correctly that these changes if introduced would negatively borrowers - especially first home buyers. Please don't sit there now and defend the introduction of legislation which was clearly flawed. The evidence is piling up!

On 24 February 2022 at 11:01 am Straight shooter said:
How are we expected to have any confidence in this man, just reactive and obviously has no knowledge of the finance industry whatsoever.

The changes to the CCCFA are plain stupid and not thought through at all David.

Take for example the quote "We have got to work out what is the intended effect (of the law) because any borrower can become vulnerable if their life circumstances change and they have taken on debt that is not affordable – that is the lending we want to stop.”

unless you haver a crystal ball and extraordinary powers how are you going to know what these circumstance changes are? divorce, death, business failure, loss of job, sickness, poor decisions i could go on, how are you going to predict these things David?

Or are going to just shut up shop and not lend to anyone.

My god, someone who has worked all their lives built up assets of $2m in their home can even borrow $50k using this stupid Law, where is the risk, stop telling people how to live their lives.

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Brian Gaynor dies
    “RIP - a true icon and such a humble person who helped so many....”
    13 hours ago by p simone
  • Brian Gaynor dies
    “Very sad. Condolences to him family....”
    14 hours ago by sanet.drury@gmail.com
  • Brian Gaynor dies
    “Brian was someone you would always go and listen to if he was presenting at a seminar or conference, someone you would always...”
    15 hours ago by MikeBeuvink
  • Brian Gaynor dies
    “A true champion of the industry. My sincere condolences to family, colleagues and friends. ...”
    15 hours ago by Pragmatic
  • [GRTV] AIA rolls out direct life insurance plans
    “Thanks Lifeadviser1, and it is great to see you have been having a play in the system. You are right, in the original...”
    17 hours ago by Sam.Tremethick
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 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 6.05 6.15
TSB Special 4.79 ▼4.34 5.25 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: 16 May 2022 9:03am

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