Author: Philip vanDyk

The New Zealand Bankers’ Association chief executive Roger Beaumont told Stuff the law change meant banks had “much less flexibility or room for lender discretion than was previously the case.”

“Banks are very much in the business of lending. They are also responsible lenders and take requirements to comply with the law very seriously.”

“The new [CCCFA] rules are fairly tight and there’s much less flexibility or room for lender discretion than was previously the case. For example, you might need to provide evidence of recent transactions so your bank can get a clear idea of your debts and expenses. This means it will take longer to get a… Read more »

While the New Zealand Bankers Association warned in its submission that proposed laws changes “may” lead to more conservative lending, Watson told MPs it was inevitable.

Recent submissions on the government’s Emissions Reduction Plan (ERP) from the Sustainable Business Council (SBC), New Zealand Bankers’ Association (NZBA) and Toitū Tahua, the Centre for Sustainable Finance (TT CSF), show an extraordinary willingness among the private sector to engage collaboratively with government on the climate transition and emissions reductions pathways.

“The law change was meant to help vulnerable consumers avoid unaffordable debt. It’s also affecting people seeking home loans, where there are traditionally very low rates of borrowers being unable to make repayments. That’s still the case, but the law change has tightened banks’ ability to lend.”

“One key to reducing harm from problem debt is supporting access to responsible, lower-cost borrowing. However, in our view, several of the proposed changes may unintentionally lead to conservative lending practices to the detriment of consumers,” said the NZBA.

Rather than see this as a matter for the banking industry as a whole, the New Zealand Bankers Association says it is an issue for each member institution to decide based on lending policies and appetite for risk, which would vary from bank to bank.