Cross Party Support Welcome for Credit Law Changes
24 September 2013
FOR IMMEDIATE RELEASE
Cross Party Support Welcome for Credit Law Changes to Protect Vulnerable Consumers
The industry organisation representing credit unions and building societies in New Zealand is pleased the Credit Contracts and Financial Services Law Reform Bill has passed its first reading with cross party support to allow it to progress to the Select Committee stage. The Bill incorporates a number of elements that will improve consumer protections for vulnerable consumers against unscrupulous lenders.
“It’s vital that there are better protections for low-income earners from the type of predatory loan-shark behaviour prevalent in those communities” says New Zealand Association of Credit Unions (NZACU) Chief Executive Henry Lynch. “This issue is urgent, affecting societies most vulnerable and we urge all political parties to continue to work together to get appropriate legislative protections in place as quickly as possible.”
“Every day our Member organisations are acting as the ‘ambulance at the bottom of the hill’ to struggling families who have found themselves in trouble because they have borrowed money from predatory loan sharks, without really understanding the full repercussions of what they are actually likely to end up paying,” said Mr Lynch.
The key changes this Bill will introduce to the Credit Contracts and Consumer Finance Act 2003 (CCCFA) are around the obligations of lenders to undertake responsible lending practices, as well as simplification and clarity of disclosure documentation.
“Taking advantage of someone’s vulnerability to get a loan out the door is not acceptable practice – it’s unfortunate that it has to be legislated that lending must be ‘responsible’, but the fact is there are unethical lenders out there who don’t care about the consequences of their lending practices” said Mr Lynch. “The changes proposed to the CCCFA by this Bill will hold those people to account to ensure they are doing the right thing for the consumer’s situation.”
Cooperatively owned credit unions and building societies in New Zealand currently have over 210,000 members, and have a long history of helping people from all walks of life achieve better financial management.
“Our Member credit unions and building societies are focused on improving the financial situation of their members, and that often involves consolidating high-interest debts to manageable levels whilst instilling a healthy, long-term savings habit” said Mr Lynch.