New consumer credit laws to come into force this week
3 June 2015
New consumer credit laws to
come into force this week
Minister of Commerce and
Consumer Affairs Paul Goldsmith welcomes new rules that will
better protect borrowers taking effect from Saturday 6
June.
“A new era in consumer lending begins this Saturday where all lenders must meet responsible lending obligations and consumers have access to better information to help them make better borrowing choices,” Mr Goldsmith says.
“The Credit Contracts and Consumer Finance Amendment Act comes into force on 6 June 2015. It gives greater protection to consumers when they’re borrowing money and helps ensure they can afford to repay the money they are borrowing.
“The law introduces harsher penalties for lenders who don’t follow the rules which the Commerce Commission will enforce.
“Our intention is not to impose unnecessary compliance costs on lenders who are already lending responsibly, but rather provide additional protection from lenders who engage in predatory practices.
Some of the key changes in the reforms include:
-
Lenders must comply with new responsible lending obligations
and those that repeatedly breach the new law can be banned
from lending.
- Lenders will need to make
information about their fees and interest rates publicly
available, making it easier for consumers to compare rates
and fees before borrowing money.
- Repossession
agents will need to be licensed and there are new rules
prohibiting repossession of essential household items such
as beds and heaters.
- Credit card billing
statements must include a minimum repayment warning.
“The Credit Contracts and Consumer Finance Amendment Act and regulations will help to increase confidence in the role consumer credit plays in our financial markets, which is a key component of the Government’s Business Growth Agenda,” Mr Goldsmith says.
ends