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Commission Issues COVID-19 Advice For Lenders And Borrowers

The Commerce Commission has issued new guidance for consumer lenders and borrowers to assist them during the COVID-19 pandemic.

“The Commerce Commission appreciates the serious impact that COVID-19 is likely to have on lenders and borrowers. Lenders will want to provide additional support and flexibility to financially stressed borrowers at this time and the scale of borrowers’ needs is expected to be unprecedented. Appropriate access to credit should be facilitated and maintained while borrowers’ interests are also properly protected,” said Commission Chair Anna Rawlings.

Lenders must comply with the Credit Contracts and Consumer Finance Act 2003 which is enforced by the Commission. It includes responsible lending requirements.

“We are providing guidance to lenders to assist them in complying with responsible lending obligations. The Commission acknowledges that the application of the CCCF Act’s requirements will be informed by the circumstances in which lenders, acting reasonably, are operating while COVID19 affects the New Zealand economy. Our approach to enforcing the CCCF Act during this period will also be strongly informed by these circumstances,” said Ms Rawlings.

The Commission has also released a question and answer document for borrowers.

“We want to help borrowers by providing information to them about other options as well as loans. The other options include Government financial support, and directing them towards services which can help them manage credit, such as financial mentors,” said Ms Rawlings.

The credit guidance to borrowers addresses likely key questions, including information about hardship and how to apply for changes to loans to help with hardship, and providing information to help lenders to meet the responsible lending requirements.

“Many people will need to take on more debt at this time, and we know that may be inevitable. However, we want to provide as much information as we can to help people avoid becoming overwhelmed by debt,” said Ms Rawlings.

COVID-19: The Commerce Commission's response
No business in New Zealand should feel constrained from doing the right thing for its customers, the safety of its staff and New Zealanders. The Commission plans to take a pragmatic approach in relation to enforcement across all of the laws that we enforce. We have provided some detail in specific areas:

  • Competition
  • Mergers
  • Investigations
  • What we will not tolerate

Other consumer and business guidance

In addition to the lender and borrower guidance referred to above, the Commission has issued other COVID-19 related advice and guidance which can all be found on the

COVID-19 section of our website.

Advice and guidance will be updated as necessary.

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