sign up Your signup was successful Subscribing..


< back

Credit laws are changing

By Melissa Higham - 25 May 2012

Lending practices and credit law in New Zealand have come under considerable criticism in the last few years.  This has resulted in significant reforms to the Credit Contracts and Consumer Finance Act 2003 which are currently before Parliament. 

There is a widely held view that New Zealand still has a lot of irresponsible lending and unscrupulous lenders.   The proposed reforms are being introduced to toughen consumer credit laws (particularly targeting loan sharks) and to protect consumers.  Whilst this may be the target, the reforms will have wide reaching implications for all lenders.

The proposed reforms include:

  • Making it illegal to lend money to someone when the loan repayments would cause substantial hardship.
  • Extended of 'Cooling Off' Periods.
  • Changes to the disclosure obligations.
  • Consequences for lenders who are not registered Financial Service Providers.
  • Changes to how lenders deal with hardship applications.
  • Prohibitions on misleading, deceptive or confusing advertising.
  • Further rules in relation to credit charges and fees.
  • Introduction of a Code of Responsible Lending (to be published within two years of the Bill coming into force).

If you are in the business of lending to consumers you will need to ensure you keep up to date with the changes that are coming. 

If you have any queries about how this may affect your lending practices please contact us.


Forward to a friend

Leave a comment