Commerce and Consumer Affairs Minister David Clark took the wrong option presented to him in the review into the Credit Contracts and Consumer Finance Act released today.
“The Council of Financial Regulators report released today presented a range of better options than those chosen by the Minister,” says New Zealand Bankers’ Association chief executive Roger Beaumont.
“The Minister’s changes will make some differences to overall lending and lending processes but will need to be done right to result in better outcomes for consumers.
“The best option presented to him would have been to target affordability regulations to riskier lending and lenders, as well as make changes to the penalties regime. Targeting affordability requirements to support those most at risk would provide them with appropriate protections as well as freeing up lending for those who can afford it.
“The government has announced some positive changes today, including narrowing the expenses considered by lenders, relaxing some assumptions that lenders were required to make about credit cards and helping make debt consolidation more accessible if appropriate for borrowers.
“These are the second set of changes to the lending rules since they came into force in December. That’s had a huge and unsettling effect on many New Zealanders and their ability to access affordable credit when they need it. We also note that these changes will not take effect until at least March 2023.
“We look forward to working with the government through the detail of the latest changes to the CCCFA rules.”