Loosening CCCFA rules might not be enough

National says it will stop banks asking intrusive questions of borrowers’ spending habits when they apply for a loan, but the bigger issue, says Bayley, is while he can make regulatory changes and remove some of the liabilities and requirements, “the CCCFA rules are now sort of semi-embedded in banks”.

“And that cultural change is going to be quite an issue. I think we can make the changes, but actually driving those changes through the banks is going to be difficult,” he says.

“The question is how we get banks back into the game of doing what they should be doing, which is lenders to the market. They have the discretion, sophistication and capability to do that, that's what we should be working on.”

He wants to take the CCCFA back to the original 2020 65-pages of regulations focused just on high cost lenders. “What we want to do is repurpose it towards what was Parliament's intent.