Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Retirement village watchdog to investigate loans

The government’s watchdog of the retirement village industry is investigating the extent of loans made to residents and intending residents by village operators.

Some operators may offer financial assistance to cover shortfalls in entry payments to those wishing to buy into a village, or to existing residents to cover accrued weekly fees.

Troy Churton, the National Manager of Retirement Villages at the Commission for Financial Capability, is looking into the practice for his annual Monitoring Report for the Minister who oversees the sector, Hon. Kris Faafoi.

Churton says the Retirement Village General Regulations 2006 require operators to set out the nature of any financial assistance they offer and the terms on which residents may receive it. However, operators offering credit to consumers become financial service providers and also need to meet obligations under the Credit Contracts and Consumer Finance Act 2003.

“CFFC is aware the Commerce Commission reminded retirement village operators in 2016 that they must follow lending requirements when offering credit to residents and that residents get all the information they need.”

CFFC understands some operators reiterate the availability of loans at residents’ meetings for those experiencing financial difficulty.

“The issue is particularly relevant in the current environment of falling interest rates and potential pressures on retirees’ income from savings,” says Churton.

The areas being monitored include:

• The types of financial assistance offered, credit terms, interest rates and how loans are charged and recouped.
• How operators advertise, represent or inform intending residents and residents about the availability of financial assistance.
• The approximate number of intending residents and residents receiving forms of financial assistance, and – for loan situations - the range of loan sizes.
• The processes operators follow in assessing, offering and administering financial assistance to intending residents or residents, including compliance with the Credit Contracts and Consumer Finance Act.
• Dispute resolution schemes operators belong to for the purposes of complying with the Financial Service Providers Act.
• How statutory supervisors oversee the lawfulness of operator processes when providing financial assistance; and the protection of residents’ financial interests.

Churton says CFFC also wishes to understand operator compliance costs, and how well residents understand the arrangements of the financial assistance they have signed up for.

His report will be delivered to Minister Faafoi next June.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: NZME 'In Discussions' To Buy Stuff

NZME confirms that it is in discussions with Stuff’s owners Nine and has put a proposal to the Government regarding a possible transaction. However, NZME notes that these discussions are preliminary... More>>

Consultation: Plan Of Action To Protect Seabirds

The draft National Plan of Action plan outlines the Government’s commitment to reducing fishing-related captures of seabirds, with clear goals and objectives, supported by an implementation plan. More>>

ALSO:

Housing Issues: Fairer Rules For Tenants And Landlords

The key changes include: - Limit rent increases to once every 12 months and banning the solicitation of rental bids by landlords. - Improve tenant’s security by removing a landlord’s right to use no cause terminations to end a periodic tenancy agreement... More>>

ALSO:

Reserve Bank: Official Cash Rate Unchanged At 1 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment remains around its maximum sustainable level while inflation remains below the 2 percent target mid-point but within our target range... More>>

ALSO:

Food Prices: Avocados At Lowest Price In Almost Three Years

Avocados are at their cheapest average price since February 2017, with tomato, lettuce, and cucumber prices also falling, Stats NZ said today. More>>