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

 

Responsible lending too taxing for some

15 August 2014

Responsible lending too taxing for some

In July a ‘responsible lending’ discussion paper was released which will help introduce changes to the New Zealand credit legislation. Within days, Napier Family Centre (NFC) received a visit from one woman whose loan agreement with a local lender made us wonder how some lenders view their responsibility.

“Young, free and single, this woman’s life could have easily been turned upside down by some ill-thought out lending. The loan for a relatively small $13,500, before fees, resulted in the client’s mother needing to act as guarantor and secure her house against the loan,” Says NFC spokesperson Suzanne Stewart.

“A loan for such a small amount held against a $215,000 house is excessive,” she says. “Why didn’t they use a car as collateral instead?”

“What was even more concerning to us was that the client would have been left with just $75 per week after rent and the $109 loan repayment to fund food, petrol, power, car and other expenses. That isn’t affordable and the loan company would have known that.”

In addition the loan agreement included some Work and Income debts and court fines which didn’t incur interest until they were amalgamated into the new loan agreement. “That isn’t sensible and this lender acted irresponsibly” Suzanne says.

Under the new legislation lenders have a responsibility to the borrower that, in essence, means they can only structure a loan one can afford to repay.

“That means asking about the borrower’s income, expenses, credit history and personal circumstances,” says Suzanne. “In this situation the client was not asked to provide any information of a budget, what she paid in rent, or for essential proof of her financial situation. This happens all too often”.

Because NFC Budgeting Services became involved before the grace period of three days lapsed a phone call and email put a stop to this loan.

Had the budgeting services team not got involved at the early stage, the borrower would have been liable for $28,340 after interest, over the five year term of the loan plus hefty penalties had she not met the repayments.

Now a happier client has a much more manageable $46 per fortnight agreement in place. With a new and better structured loan through an alternative lender. NFC Budgeting Service is pleased with the outcome.

“Our advice to anyone in a situation where they are thinking of consolidating debts or taking out a loan that sounds too good to be true is…it probably is!” “We recommend talking to a budget advisor first, our services are free, confidential and non-judgmental, so please use them.”

About Napier Family Centre
Napier Family Centre is a not for profit community based, social service agency founded on inter-church leadership. Our commitment is to provide competent professional services in a wide range of areas to help families in our communities. Our trained budget advisors offer individuals and families free, confidential, non-judgmental advice and support, help with planning a budget and living within an income, negotiations with creditors as required, support in developing good money management skills and more. Napier Family Centre budgeting service is an accredited member of the NZ Federation of Family Budgeting Services (NZFFBS). Budget advisors are certificated under NZFFBS.

ENDS

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Joseph Cederwall: Building a Community Newsroom

The “Scoop 3.0” Transition Plan
There is good reason to believe that a new path and a better future is possible for Scoop in 2019 as a pioneering independent Media company. A combination of new technology, ideas, institutions and business models and a renewed energy and commitment by the Scoop team, means Scoop aims to be at the forefront of the development of this renaissance that we term ‘News 3.0’.

By opening up Scoop’s structure to community ownership and exploring decentralised technology through the blockchain we can ensure the public has a stake in this enterprise and a say in its development. More>>

 

Gordon Campbell: On Jami-Lee Ross (And The New Hobbit Law)

Clearly, Jami-Lee Ross is not waging a normal form of political warfare, with agreed rules of combat and rational cost/benefit calculations.

This is politics-as-terrorism where everything is being sacrificed by the man in the bomb vest in order to remove Simon Bridges as the leader of the National Party. More>>

Text Messages Released: National On $100,000 Donation(s)
The Botany Electorate of the National Party received 8 donations, and Mr Ross declared 8 donations to us. More>>

ALSO:

Film Industry Working Group:

Three Killed: DOC Supporting Family, Colleagues After Helicopter Crash

The Department of Conservation (DOC) is rallying around family and colleagues of the staff who died in a helicopter crash this morning in Wanaka... The helicopter, with two DOC staff on board, was on its way to undertake tahr control in the Haast area when it crashed. More>>

ALSO:

Political Donations: Greens Call For Tighter Anonymity Rules And Public Funding

“It is clear that those vested interests have a tangible influence on the decision making of political parties. This is a threat to democracy and should change.” More>>

ALSO:

Education Amendment Bill Passes: Urgency Sought For Partnership School Treaty Claim

The claim takes issue with the acts and omissions of the Crown in respect of the closure of Partnership Schools | Kura Hourua. More>>

ALSO:

Salvation Army Paper: Call For Public Housing Investment

To meet these future demands the report suggests the government needs to look beyond the private rental market and begin to invest heavily into home-ownership programmes and more public and social housing. More>>

ALSO:

Cull: Himalayan Tahr Control Operation Proceeding

“The target of controlling 10,000 Himalayan tahr over the next eight months remains. The revised plan provides for a staged control operation with increased reporting to the Tahr Liaison Group...” More>>

ALSO:

Health: Petitions To Fund Breast Cancer Drugs

Women marching to Parliament today, to present two petitions calling for Government funding of vital medicines, have 100% support from a coalition representing than 30 breast cancer organisations. More>>

ALSO:

Animal Welfare Advisory Committee: Report On Rodeo Practices Released

The independent committee that advises the Minister responsible for Animal Welfare, has today released a report on animal welfare in rodeos, together with advice to the Minister making recommendations to improve the welfare of the animals in rodeos. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels