Commerce Minister must clear the way for P2P lending

ACT Leader David Seymour is calling on the Minister of Commerce to allow peer-to-peer platforms flexibility about who they charge for their service.

“A country of our size and location must be a more nimble regulator than other countries, especially in a time of rapid technological change. It was disappointing to see the Minister of Commerce, under questioning in the House, had no answers other than that he’s ‘considering the options’, especially considering the sector brought this to his attention four months ago.

“Badly-drafted red tape and an overzealous regulator is threatening the growth of peer-to-peer lending. MBIE is advising the Minister to apply fee restrictions to these companies as if they are traditional lenders, despite the fact that they are not actually lenders, but intermediaries connecting personal lenders with borrowers.

“This stands in stark contrast with the UK, US, and Australia, where peer-to-peer lenders are using models that the Commerce Commission objects to, where platforms can charge fees to borrowers as well as lenders.

“The Government would be foolish to scare off peer-to-peer platforms like Harmoney, PledgeMe, and Squirrel Money when the global industry is set to be worth $500 billion by 2025. If we don’t liberalise now we risk being left behind by the sector entirely.

“The Commerce Commission has spent millions trying to interpret the Credit Contracts & Consumer Finance Act, while peer-to-peer platforms tear their hair out dealing with the uncertainty and (in the case of Harmoney) court costs.

“Rather than waiting for a costly and elongated test case, the Minister should amend the law and bring us in line with overseas jurisdictions.”

ENDS

© Scoop Media