Subj : Minister defends lending changes, pledges to target 'bad actors'
To   : All
From : News
Date : Mon Apr 22 2024 11:57 am

Commerce and Consumer Affairs Minister Andrew Bayly has defended the
Government's bid to make it easier to borrow money, saying the Commerce
Commission will chase up any "bad actors" who take advantage.

Bayly announced the changes yesterday. He said the existing regulations
created unnecessary costs, adding the planned new rules will strengthen
customer protections.

"We are revoking 11 pages of overly prescriptive affordability regulations,
introduced by the last government, to enable Kiwis to access finance with
confidence," he said.

Bayly told Breakfast this morning: "I'm very worried and have been for quite
some time that people who want to go and get small amounts of money and don't
have thousands sitting in their bank account have had to go through these
really rigorous tests.

"Those people we really want to protect are having to go to loan sharks or
other people that we really don't want them going to."

He said lenders would need to meet the minimum requirement of not putting
anyone in financial hardship.

"We're going to strengthen the dispute mechanisms, that's a very important
part [of the new rules]," Bayly said.

"I've also said to the Commerce Commission, urged them to use all their
litigation fund.

"I've been very explicit with them because we want to drive the bad actors
out of the market."

He said increased financier discretion would mean that established customers
benefited.

"If you do not know the person, or there's a difficult loan application, or
whatever, you will have to do fulsome checks," Bayly said. "If they don't do
the work and, subsequently, it puts someone in financial hardship, then
they'll be prosecuted by the Commerce Commission."

The new rules
The Government's announcement yesterday targeted the Credit Contracts and
Consumer Finance Act 2003 (CCCFA).

The changes will see the Responsible Lending Code updated once detailed
requirements for assessing the affordability of loans are revoked from the
CCCFA.

Redundant Covid-19 exemptions will be cut from the CCCFA while the move will
also see changes to the dispute resolution scheme, CCCFA exemptions for
councils and the removal of some "duplicate" reporting requirements.

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