Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search

 

Govt announces extra protection against loan sharks


The government has announced extra measures to protect people against loan sharks.

Commerce and Consumer Affairs Minister Kris Faafoi. Photo: RNZ / DOM THOMAS

An interest rate cap will reduce how much it costs to borrow money.

Commerce and Consumer Affairs Minister Kris Faafoi announced that an interest rate cap of 0.8 percent day will be included in the bill going through Parliament at the moment.

In April, the legislation was introduced to Parliament to protect people against loan sharks, but during the select committee stage, the bill was criticised for not going far enough.

The bill already includes a cap on the total cost of borrowing, which means people taking out high-cost loans will never have to pay back more than twice the amount they originally borrowed, including interest and fees.

In addition, all truck shops and other mobile traders will be required to check that credit is affordable and suitable for each customer before providing anyone with goods that aren't paid for upfront and to provide information to help borrowers make informed decisions about whether to sign up for credit.

The legislation is expected to pass this year and will come into effect in stages, starting in March.

Mr Faafoi said: "At the moment, high-cost credit is too easy for people in hardship to access. While this type of credit can be an immediate solution to financial problems, we know that high-cost, easy credit leads to worse problems in the long run...

"I know that some lenders are already referring customers who are struggling with repayments to financial mentoring services and this is good to see because it ensures that those struggling with debt can access the advice they need to get back on their feet. I encourage other lenders to follow this example. We are changing the law so that this can become a requirement in future, if needed."


© Scoop Media

 
 
 
Top Scoops Headlines

 

Analysis: Dotcom Appeal For Surveillance Data Dismissed

Kim Dotcom’s Appeal against the decision allowing the GSCB to withold information as to communications illegally intercepted by them has been dismissed by the Court of Appeal of New Zealand. More>>

ALSO:

Gordon Campbell: On China’s Bad Week

Even before the local body election results came in from Hong Kong, China had been having a p.r. nightmare this week. First, the ICIJ released a trove of leaked cables about the mass concentration camp system that China has built to control and to “re-educate” over a million people from its Uighur minority... More>>

Julie Webb-Pullman: Jacinda, THAT Tweet, And Gaza

The MFAT tweet condemning rocket fire from Gaza while failing to condemn the Israeli extrajudicial assassinations and civilian killings that generated Islamic Jihad’s rocket-fire in defensive response, reveals the hypocrisy at the heart of New Zealand’s so-called “even-handed” foreign policy and practice towards Palestine. More>>

Hope For Nature: A New Deal For The Commons

Joseph Cederwall on The Dig: To fully understand the biodiversity crisis and explore what comes next, it is necessary to address this mind-virus at the heart of our modern civilisation – the dominion worldview. More>>

ALSO:

 
 
 
 
 


 
 
 
  • PublicAddress
  • Pundit
  • Kiwiblog