New Kiwi research questions Government’s loan shark decision
The Government's decision to not cap the interest rate loan sharks can charge is under further scrutiny following the release of a new report.
The Borrin Foundation-funded report - Working Towards a Fairer Consumer Credit Market - is authored by Commercial Law expert and Victoria University Academic Victoria Stace. It finds overwhelming evidence of a need for an interest rate cap in the new law.
FinCap CEO Tim Barnett says Stace’s work needs to be taken onboard by decision makers. “Predatory lending is taking $120 million out of low-income households every year, this research, along with earlier research by BERL shows that the new law won’t make a big difference to that unless it has an interest rate cap added to it.
“This new body of research offers the Government the opportunity for an evidence-based decision to make their proposed law much more effective.
“For a Government concerned about stopping child poverty, adding an interest rate cap should be an easy decision to make. This change is backed by a big coalition of frontline organisations, it’s supported by substantial research, and it’s in line with international practice.”
FinCap is the umbrella organisation supporting 200 financial capability and budgeting services in New Zealand. The current coalition of support for an interest rate cap includes: Age Concern, Child Action Poverty Group, Christian Budgeting New Zealand, Christians Against Poverty, Citizens Advice Bureau NZ, Community Law Aotearoa, Family Works, FinCap, Good Shepherd NZ, Iwi Chairs Forum, Ngā Tangata Microfinance, NZ Council of Christian Social Services, The NZ Council of Trade Unions, and the Salvation Army.