Major Changes In The Lending Industry Set To Take Effect
Upcoming changes to New Zealand’s consumer credit regulation will likely see longer wait times for borrowers applying for home loans, personal loans, credit cards and loans to finance vehicle purchases.
Law firm Bell Gully released a report today summarising the changes to the Credit Contracts and Consumer Finance Act (or “CCCFA”) which will take effect on 1 December 2021. These changes will see New Zealand move further down a road of increased regulation, while across the Tasman the Australian Government is seeking to relax restrictions to ensure the flow of credit.
“New Zealand and Australia are currently at odds when it comes to their approach to consumer credit – Australia is looking to dial back restrictions just as New Zealand ramps them up,” said Sophie East, a partner with Bell Gully.
She said that the changes to consumer credit laws in New Zealand are wide-ranging and significant. They include a personal duty on directors and senior managers to exercise due diligence to ensure that their businesses comply with the CCCFA, with significant penalties if they do not ($200,000 per individual, and $600,000 per company). “This will affect all directors and senior managers in the consumer credit sector and requires them to give serious consideration to the processes and procedures in their businesses to ensure compliance with the relevant law.”
The Big Picture: CCCFA reform – a new consumer credit landscape outlines the key consumer credit changes to take effect and the potential impacts for lenders and borrowers, as well as exploring recent and anticipated enforcement trends. Read it here.