Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


FSF reacts to government's interest rate cap announcement

The Financial Services Federation (FSF), the industry body representing responsible finance and leasing companies in New Zealand, says new proposals to better protect borrowers are a step in the right direction, but more can be done to target predatory lenders causing harm to consumers and tainting the sector.

Commerce and Consumer Affairs Minister, Hon Kris Faafoi, released on September 3, 2019, further proposals to better protect borrowers, including a 0.8% per day cap on interest and fees.

"This cap equates to an effective finance rate of 292% per annum, which is still high-cost lending in anyone's terms," says Financial Services Federation (FSF) Executive Director, Lyn McMorran.

"This sort of high-cost lending is not the market in which our members operate, so we are not trying to wriggle out of anything with our recommendations, but we do want to make sure that reforms will actually make a targeted difference where harm is being done, and will be enforced to stamp out dodgy lenders.”

The FSF is still of the stance expressed in its submission that the Bill should go further in providing consumer protections when consumers are borrowing from lenders who charge at or near the proposed cap, by clearly defining parameters for payday lending in the law. It should be explicit that that these loans should be small amount and provided only for short terms or “emergency” type situations, and that payday lenders should be identified as such on the Financial Services Providers Register to assist with enforcement of these parameters.

Further proposals released on Tuesday state that all truck shops and mobile traders will be required to check that credit is suitable and affordable for each customer and to help borrowers make informed decisions about whether to sign up for credit - obligations that already exist under the current law.

"These very proposals made today around mobile traders already exist in the current law, and if they are clearly being flouted by rogue lenders as we have seen in the media, the question is why are these obligations not being enforced now?," says McMorran.

FSF supports the third, new proposal to encourage lenders to put borrowers who are struggling with repayments in touch with financial mentors, and just last month proactively signed a Memorandum of Understanding with FinCap formalising the two organisation's already good working relationship and commitment to working together towards good outcomes for consumers.

FSF is still firm in its stance that passing any further legislation will not make a difference to harm being caused by irresponsible lenders unless it is properly enforced and the Commerce Commission sufficiently resourced to so.

The FSF's submission can be downloaded here.

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Hope For Nature: A New Deal For The Commons

Joseph Cederwall on The Dig: The disruption and destruction of the interconnected biodiversity of Earth is the most serious challenge humanity has ever faced. This is an ecosystem emergency on an extinction scale. It is also a serious threat to the inherent rights of the diversity of non-human life, ecosystems and human Cultures on Earth to exist and thrive. The current global paradigm is devastating life everywhere by disrupting vital “ecosystem services” like the food, water, and climate regulation systems that both humanity and biodiversity depend on in an interconnected balance. It is increasingly clear that the primary driver of this crisis is the limiting and infectious worldview around land and resource use so central to the global capitalist system. 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>>


Gordon Campbell: On The Farming Sector’s Persecution Complex

The narrative that our farmers are ‘doing it tough’ plays into a number of wellworn stereotypes ... More>>


corrections, prisonCorrections: Independent Review Of Prisoner Mail Management

The independent review into the prisoner mail system has today been released, with Corrections accepting all 13 recommendations and making a number of changes to strengthen the management of prisoner mail. More>>


IPCA: Unlawful Detention Of Teenager; Influence Of Investigation

The Independent Police Conduct Authority has found that former Inspector Hurimoana Dennis unlawfully detained an Auckland teenager in 2015, and improperly influenced the outcome of a criminal investigation into his own son in 2014. More>>


SOP For Gun Bill: New Measures For Modified Pistols

The new controls will • Prohibit short-barrelled semi-automatic rifles which currently are defined as pistols because they are shorter than 762 millimetres. • Introduce tighter controls over pistol carbine conversion kits… • Prohibit firearms which contain a part known as a centrefire lower receiver… More>>

'Culturally Arranged Visitors Visa': Fix For Marriage Visa Issue

Earlier this year Immigration New Zealand issued guidance to front line Immigration staff that made it significantly harder for people to get visas to visit their partner. That guidance no longer applies with today’s announcement. More>>


Conflict Of Interest For Key Member: Budget Data Breach Investigation Shut Down

State Services Commissioner Peter Hughes has today terminated the investigation into how Budget-sensitive material was accessed at the Treasury and appointed a new inquirer. More>>

RNZ Report: Mysterious Foundation Loaning NZ First Money

A mysterious foundation that loans money to New Zealand First is under scrutiny, with a university law professor saying although it's lawful, it fails to provide the transparency voters need in a democracy. More>>

Justice: Criminal Cases Review Commission Established

“We’ve seen how our justice system can very occasionally get things spectacularly wrong, even with rights of appeals, and there needs to be a chance for the innocent on the right grounds to seek a final review of their case...” More>>





InfoPages News Channels