Author: Philip vanDyk

The Bankers Association welcomes changes announced last week to the Credit Contracts and Consumer Finance Act (CCCFA) but says they do not go far enough.

Roger Beaumont, chief executive of the New Zealand Bankers’ Association, said that while the government “identified some of the main pain points for consumers,” ’it is “not clear the changes … will move the dial enough to make a difference.”

“We suggest that the RBNZ waits to assess the impact of LVRs and the CCCFA changes before further developing the framework for DTIs.”

“The combination of LVR restrictions, CCCFA changes, increasing interest rates and taxation changes in particular appear to be having the effect of slowing growth in the home-lending market,” the Association said in its submission. These changes “may have resolved the problem that DTIs would be designed to address,” it said.

“We’d like to see the new rules work in a way that doesn’t restrict access to responsible lending for consumers who can afford it, while ensuring vulnerable consumers are protected from high-cost credit that may not suit their circumstances,” NZBA CEO Roger Beaumont said.

NZ Bankers Association’s Roger Beaumont told Andrew Dickens they’ll help, but the law could still be improved. “I would describe them as a small step in the right direction. There’s a lot more heavy lifting that needs to go on in terms of getting into the detail of these regulations.”

“We’d like to see the new rules work in a way that doesn’t restrict access to responsible lending for consumers who can afford it, while ensuring vulnerable consumers are protected from high-cost credit that may not suit their circumstances. These changes maintain the one-size fits all approach that hasn’t worked so far.”

Roger Beaumont, NZBA chief executive, said: “We think they’ve identified some of the main pain points for consumers, but it’s not clear the changes announced today will move the dial enough to make a difference.