HON CRAIG FOSS

Minister of Consumer Affairs

17 March 2014 Media Statement
Loan shark crack-down continues

Commerce Minister Craig Foss has welcomed the Commerce Select Committee report on a Bill that will crack-down on unscrupulous lenders who leave borrowers and their families in a spiral of uncontrolled debt.

“Proposed changes under the Credit Contracts and Financial Services Reform Bill will help to increase confidence in the role consumer credit plays in our financial markets, which is a major component of the Government’s Business Growth Agenda,” says Mr Foss.

“We are improving protections for borrowers by promoting responsible lending practices without imposing unnecessary compliance costs on lenders who already have good systems in place.

“We are targeting unscrupulous lenders by ensuring consumers are given the information they need to make informed decisions and boosting enforcement powers and penalties to crackdown on those lenders who breach the law. I would also like to take this opportunity to thank the Committee for its contribution towards the development of this important Bill,” says Mr Foss.

The Select Committee’s changes include:

• Clarifying the status of the Responsible Lending Code that will set out the best practice guidance for responsible lending.

• Positive improvements to the credit repossession rules in the Bill that will increase the protection for consumers from unfair repossession practice.

• Amending the continuous disclosure regime to require a minimum repayment warning on all credit card statements.

• Significantly increasing penalties for creditors that breach credit laws to maximum fines of $200,000 for individuals and $600,000 for companies.

For more information, visit www.parliament.nz/en-nz/pb/legislation/bills/00DBHOH_BILL12096_1/credit-contracts-and-financial-services-law-reform-bill

ENDS

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