Proposed Law Gives Loan Sharks Free Pass From Government
Monday 8 April 2019
The Government’s proposed law to "crack down" on predatory lending - the Credit Contracts and Consumer Finance Amendment Bill - will give loan sharks a free pass in its current form say budgeting services.
The Bill which is scheduled to have its first reading in Parliament on Wednesday is missing an interest rate cap - the one essential measure for real change says FinCap Chief Executive Tim Barnett.
"We work closely with 200 budgeting services in New Zealand, with international consumer credit experts, and with experts in New Zealand’s consumer credit law. None of them believe the Government’s new law will seriously curtail predatory lending.
"As it stands, the new law is overly complex and full of loopholes and the strong expert consensus is that an interest rate cap is a bottom line to make this legislation work.
"We desperately need this law to properly protect low income New Zealanders. Every day our budget services see families going without basic needs like food or warm clothing, or missing electricity or rent payments. That’s because they are servicing loans with huge interest rates and falling into traps set by predatory loan companies.
"The Government has said it is committed to fixing the growing child poverty problem. That’s just not possible without much better protections for low-income families against predatory lending. An interest rate cap simply must be included in the new law."
FinCap is the umbrella body for New Zealand’s budgeting and financial capability services and is working with a broad coalition of organisations to ask the Government to fix this legislation.
For an FAQ on this issue visit www.fincap.org.nz/loansharks
There is an online petition in partnership with CTU Together at www.together.org.nz/loansharks