The banking industry welcomes the first reading of the Credit Contracts and Consumer Finance Amendment Bill. This includes an important adjustment to limit the risk of excessive consequences for minor disclosure breaches.
“We believe the change proposed in the amendment bill is fair as it simply tidies up the existing legislation to ensure that all breaches from 2015 to 2019 are treated the same as those currently,” says New Zealand Banking Association chief executive Roger Beaumont.
“It is important to note that consumers will still be protected, and lenders will still be appropriately held to account once the law is amended. The changes simply confirm that, if a lender fails to meet their disclosure obligations, the courts can decide what is a ‘just and equitable’ outcome for that failure. That is no different to other civil and criminal cases and does not stop any current or potential future cases brought under this Act. Consumers and regulators can continue to bring CCCFA claims before the courts.
“We have openly and transparently argued for changes to these particular disclosure provisions under this legislation for almost ten years. And for good reason – the potential consequences are out of step with the potential harm. Currently any minor breach in a disclosure document, such as a wrong address, for the years 2015 to 2019 may require a full refund of interest and fees. That is not fair or proportionate compensation for customers who may not have suffered any material impact to their finances.
“All 17 members of the New Zealand Banking Association, including large banks and smaller New Zealand-owned banks, support these changes,” says Beaumont.
ENDS
Note: The reasons for the CCCFA amendment are set out in MBIE’s regulatory impact statement of 5 March 2025: https://www.mbie.govt.nz/dmsdocument/30485-ris-retrospective-application-of-relief-from-section-99-1a-pdf