Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More
Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Government crackdown on loan sharks

Rt Hon Jacinda Adern
Prime Minister of New Zealand

Hon Kris Faafoi
Minister of Commerce and Consumer Affairs

10 October 2018 Embargoed until 10am PĀNUI PĀPĀHO
MEDIA STATEMENT


Government crackdown on loan sharks

• Cap on total interest and fees charged
• Stiff penalties for loan sharks who break rules
• ‘Fit and proper person’ test for lenders, door-to-door salespeople and truck shops

The Government is introducing tough new measures to protect people from loan sharks and truck shops, Prime Minister Jacinda Ardern and Commerce and Consumer Affairs Minister Kris Faafoi announced today.

“This Government is committed to making New Zealand the best place to raise a child,” Jacinda Ardern said. “To do that we must stop families becoming trapped in the appalling debt spirals and poverty that result from onerous lending and payback terms.

“These new measures will halt the very worst of those preying on vulnerable and desperate people while enabling borrowing that meets their needs in an affordable way.

“They will protect families through capping the total interest and fees charged loans, introducing tougher penalties for irresponsible lending, and raising the bar for consumer lenders to register as a Financial Service Provider,” Jacinda Ardern said.

The announcement was made at the Vaiola Pl Budgeting Service in Mangere, where the Prime Minister and Minister Faafoi met with people affected by predatory lending as well as budget and financial advice providers.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

“The 2015 amendments to the Credit Contracts and Consumer Finance Act (CCCFA) did not go far enough in protecting our most vulnerable consumers from loan sharks,” Kris Faafoi said.

“The introduction of an interest and fees cap on high-cost loans will prevent people from accumulating large debt from a single small loan. For example, if you borrow $500 you will never have to pay back more than $1,000 in total, including all fees and interest.

“The changes also lift the level of professionalism across the industry, by requiring directors and chief executives of lenders offering consumer credit contracts to pass a ‘fit and proper person’ test in order to register as a Financial Service Provider.

“Any lenders breaching the responsible lender principles will face stiff new penalties of fines up to $600,000 under the strengthened enforcement provisions in the CCCFA.

“We listened to consumer advocates and the finance sector’s feedback and will also be seeking increased resources for enforcement and monitoring to ensure lenders who break the law are detected and stopped,” Kris Faafoi said.

The Government is also tackling predatory behaviour by truck shops and others who sell door-to-door on credit or other deferred payment, by requiring all mobile traders to pass the ‘fit and proper person’ test.

The law will also be strengthened to give consumers clearer powers when asking uninvited salespeople to leave their premises, including by strengthening the legal status of ‘do not knock’ stickers, he said.

The new measures will come into effect from 2020, subject to Parliamentary timeframes.

More information on the Review of the CCCFA is available here. [https://www.mbie.govt.nz/info-services/consumer-protection/review-of-consumer-credit-law]

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines


Gordon Campbell: On The US Opposition To Mortgage Interest Deductibility For Landlords


Should landlords be able to deduct the interest on the loans they take out to bankroll their property speculation? The US Senate Budget Committee and Bloomberg News don't think this is a good idea, for reasons set out below. Regardless, our coalition government has been burning through a ton of political capital by giving landlords a huge $2.9 billion tax break via interest deductibility, while still preaching the need for austerity to the disabled, and to everyone else...
More


 
 

Government: Concerns Conveyed To China Over Cyber Activity
Foreign Minister Winston Peters has confirmed New Zealand’s concerns about cyber activity have been conveyed directly to the Chinese Government. “The Prime Minister and Minister Collins have expressed concerns today about malicious cyber activity... More

ALSO:


Government: GDP Decline Reinforces Government’s Fiscal Plan

Declining GDP for the December quarter reinforces the importance of restoring fiscal discipline to public spending and driving more economic growth, Finance Minister Nicola Willis says... More

ALSO:


Government: Humanitarian Support For Gaza & West Bank

Winston Peters has announced NZ is providing a further $5M to respond to the extreme humanitarian need in Gaza and the West Bank. “The impact of the Israel-Hamas conflict on civilians is absolutely appalling," he said... More


Government: New High Court Judge Appointed

Judith Collins has announced the appointment of Wellington Barrister Jason Scott McHerron as a High Court Judge. Justice McHerron graduated from the University of Otago with a BA in English Literature in 1994 and an LLB in 1996... More

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels


 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.