Banks welcome changes to consumer lending law

The banking industry welcomes changes to consumer lending law announced by the government today.

New Zealand Banking Association chief executive Roger Beaumont says: “We welcome the removal of overly prescriptive affordability assessment requirements because it should help fix the one-size-fits-all approach that treated all types of lending and borrowers the same.

“The change still means that consumers are protected, and lenders need to be responsible.

“This will help bring back flexibility and discretion for banks to help customers in need, for example in emergency situations, and better recognises that banks already have their own prudent lending policies, which help ensure borrowers can afford to repay any debt.

“We look forward to working with officials on Responsible Lending Code guidance, to get the balance right and help ensure we don’t see a prescriptive approach reintroduced.

“We are also pleased to see moves to simplify other matters in the CCCFA, especially personal liability for directors and senior managers, and the requirements for disclosure of information to borrowers. We will work constructively with the government on these changes.”