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MP welcomes introduction of loan shark legislation

Peseta Sam Lotu-Iiga
MP for Maungakiekie

19 April 2013

MP welcomes introduction of loan shark legislation

Peseta Sam Lotu-Iiga, MP for Maungakiekie, has welcomed the introduction of the Consumer Credit and Financial Services Law Reform Bill by the Minister of Consumer Affairs, Hon Craig Foss.

“The bill is the fulfilment of a personal campaign for me and incorporates many aspects of my private members bill which was launched on 12 May 2011. These important reforms are about delivering a fair and responsible lending environment for consumers, as well as rebuilding confidence and credibility in the New Zealand financial sector.” Mr Lotu-Iiga says

“Currently, some borrowers struggle to pay back loans, sign up to disproportionate contracts and do not understand how much a loan will cost. Consumers are often not told key information until up to 5 days after a loan contract is signed.”

“Also, advertising is sometimes deceptive and misleading, so people do not understand the real cost of a loan.” Mr Lotu-Iiga says

The Bill introduces a wide range of changes, including:
• Lenders will have to take responsibility for the likely effect of the credit they provide
• Lenders will only be able to lend money when the loan meets the borrower’s requirements and objectives, and the payments required won’t cause substantial hardship for the borrower
• Lenders may be banned from the industry if they do not lend responsibly
• A new Code of Responsible Lending will be introduced
• There will be better controls against misleading, deceptive or confusing advertising
• Consumer goods cannot be repossessed unless they are specifically identified in the credit contract
• Licensing of repossession agents and employees.

“The Labour Government had 9 long years to help vulnerable communities and families, that have been preyed on by unscrupulous lenders. Families have been trapped into a lifetime of debt, poverty and have had no financial recourse, yet Labour did nothing to help them.”

“National campaigned on introducing new laws to target loan sharks and protect unwary consumers and we are delivering on that promise.”

“The communities in my electorate of Maungakiekie and many more across our country will welcome the introduction of this bill. I look forward to debating the bill and hearing public submissions as it makes its way through the house and select committee.” Mr Lotu-Iiga says

ENDS

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