27 May 2009
Media Statement

English leaves vulnerable at mercy of loan sharks

Finance Minister Bill English and the National Government are dragging their heels on reining in loan-sharks, Labour Associate Justice Spokesperson Charles Chauvel says.

“Vulnerable New Zealanders are being charged up to 2000 percent interest each year while the National Government makes no commitment to act,” Charles Chauvel said.

“A number of countries now have restrictions in place that set maximum interest levels that can be charged by finance companies. I fail to see why New Zealand cannot and does not have the same restrictions.

“Protecting people from being charged horrendous interest rates should be a priority for the Government, particularly at the present time, when people are already feeling under financial pressure.

“I have a Private Members Bill that already has support from the Progressive, Green and Maori Parties that would rein in the loan sharks. But rather than supporting this measure, Bill English and Consumer Affairs Minister Heather Roy choose to make no commitment to take action.

"I was appalled to see a recent letter from the Minister of Consumer Affairs stating that she was not in favour of imposing controls on ‘fringe lenders’ because it might cause some of them to exit the market.

“If lenders who charge 2000 percent interest will exit the market unless they can charge these extortionate rates then so be it.

“Unless restrictions on interest rates are introduced, then vulnerable people will continue to be taken advantage of.

“Its time that National, Act and Peter Dunne started thinking about people not just the profits of the loan-sharks,” Charles Chauvel said.

ENDS

© Scoop Media