Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


Minister's crack-down on loan sharks a crack-up

Minister's crack-down on loan sharks a crack-up


Loan sharks profiteering from our poorest communities will be laughing out loud as they read the ineffectual restrictions included in the latest version of the Credit Contracts and Financial Services Reform Bill.

Lenders who already have good systems in place will not be affected by the changes. Loan sharks also know they will not be affected by the improved protections for borrowers, including responsible lending practices, because their clients are most unlikely to be aware of their rights or understand what 'responsible lending' means. Unscrupulous lenders know
the borrower who is desperate to get the fridge or the car fixed, or food on the table for their children, will not grasp the significance of a daily 1% - 2% interest charge.

Dr Claire Dale, spokesperson for Child Poverty Action Group and a trustee of Nga Tangata Microfinance Trust says "We are pleased to see the introduction of clearer tests for unreasonable credit fees and default fees, and more clarity around the guidelines for the Courts to reopen 'oppressive' credit contracts. However, the clients we see at Nga Tangata often come from communities where 50% to 100% interest is a comparatively 'good' rate, so what would be unreasonable?"

These borrowers are 'oppressed' by high interest loans because they may have a bad credit rating, or are nervous about being turned away by mainstream banks. Loan sharks are likely to be the only lenders in walking distance.

The Government is targeting unscrupulous lenders by putting the onus on consumers to make informed decisions and to know their rights. The consumer also has to know where to go and what to do if those rights are impinged. A person borrowing from a loan shark cannot afford legal representation to pursue their rights when their goods are
repossessed or their house is stripped when their repayments are late. This makes the increased penalties for creditors breaching credit laws an empty threat.

Dr Dale says "There is no balance of power between loan sharks and their clients, so the role for the Government is clear. To provide genuine protection for consumers, the Government needs to cap interest rates, like most of the rest of the civilised world including Australia, USA, 21 European countries, Japan and South Africa." A maximum all-inclusive
charge for interest and administration would protect the vulnerable and desperate consumer, and put an end to the cruel and enduring financial torture so many of our poorest families are suffering. "It is time to mend these huge cracks in consumer protection."

--ENDS--

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Sugar: Auckland Leisure Centres Axe Unhealthy Drinks

Auckland Council is to stop selling drinks that are sweetened by sugar from vending machines at its leisure centres in a bid to try to reduce obesity and type 2 diabetes... More>>

ALSO:

Gordon Campbell: On Todd McClay’s Faulty Memory

Time and again, whenever an issue arises the initial response by government is to deny or diminish the problem – nothing to worry about here, everything’s OK, move on. Then, hang on. In line with the usual pattern, as embarrassing details emerged into daylight, the story changed. More>>

ALSO:

Labour's 'Future Of Work': Major Reform Of Careers And Apprenticeships

The next Labour Government will transform careers advice in high schools to ensure every student has a personalised career plan, Leader of the Opposition Andrew Little says. More>>

ALSO:

State Investments Management: Treasury Likes IRD, Not Education Or Corrections

The Inland Revenue Department has scored an 'A' in the first tranche of the Treasury's investor confidence rating for state agencies that manage significant Crown investments and assets, gaining greater autonomy as a result, while the Corrections and Education ministries gained a 'C' rating. More>>

ALSO:

Govt Goal: NZ To Be "Predator Free" By 2050

Prime Minister John Key has today announced the Government has adopted the goal of New Zealand becoming Predator Free by 2050... “That’s why we have adopted this goal. Our ambition is that by 2050 every single part of New Zealand will be completely free of rats, stoats and possums." More>>

ALSO:

Gordon Campbell: On The IOC’s Treatment Of Russian Sport, And Lone Wolf Terrorism

A blanket ban on Russian athletes would also have exposed the IOC to criticism that its treatment of Russia would have been marked contrast to its treatment say, of the track and field team from Kenya – a country about which the IOC has very similar doping concerns. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news