Initial Changes To CCCFA Lending Rules Effective Today

Jen Baird, Chief Executive at REINZ, says: “REINZ welcomes the Government’s new guidance in the Responsible Lending Code and tweaks to the Credit Contracts and Consumer Finance Regulations 2004 — now in force. The latest amendments address some of the issues raised by the changes which came into effect in December 2021, such as excessive inquiries by lenders into potential buyers living expenses. While the changes will be a relief to borrowers and lenders, bringing necessary clarity, they are modest in their scale.

“The initial Credit Contract and Consumer Finance Act (CCCFA) amendments announced 1 December 2021 had a significant impact on the property market, and despite being well-intended, required urgent reconsideration. Across the country, REINZ members reported the reforms’ negative impact on capable borrowers. Members saw a marked decrease in first home buyers and increased caution in the market due to uncertainty around the ability to arrange suitable finance in time to be able to buy — particularly unconditionally,” adds Baird.

“These changes may encourage prospective buyers to reconsider their opportunities within the market. We look forward to the wider review of the consumer credit regime — due this month — to see what further changes are considered and the effect on borrowers and lenders,” concludes Baird.
 

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