Sharechat Logo

Government targets loan sharks with new bill

Monday 2nd April 2012

Text too small?

The government is cracking down on loan sharks, with the release of the draft Credit Contracts and Consumer Finance Amendment Bill, designed to protect consumers from irresponsible lenders.

Consumer affairs minister Chris Tremain will visit community and interest groups around New Zealand over the next six weeks to discuss the bill.

“These will be the biggest changes to consumer credit law in a decade,” Tremain said. “It is time for a significant shift in lending laws to increase protection for borrows and target irresponsible lenders.”

The changes include better controls against misleading, deceptive or confusing advertising, the complete disclosure of loan terms and an extension of the ‘cooling off’ period for borrowers to cancel their loan.

The government will also introduce a new code of responsible lending, meaning non-compliant lenders will be banned from the market. Borrowers will no longer have to pay interest or fees if lenders are not registered financial service provider.

Under the law it will also be illegal to lend money to someone whose loan repayments would likely result in substantial hardship.

In October, the Cabinet agreed to introduce tougher consumer credit laws after a financial summit in August looked at ways to tack irresponsible lending and greater penalties for unregistered lenders.

Once submissions on the draft bill have been considered the legislation will be finalised and introduced to parliament. It is hoped that the new legislation will be in effect by mid-2013.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Mandatory farm plans scorned as 'tick box' exercises
Kiwi dollar firms on weak US retail data, capped by rate-cut expectations
17th October 2019 Morning Report
SkyCity hoses down union claims over potential job losses
OPINION: Fair Payment Agreements and 'swallowing vomit' - the lot of the CTU
MARKET CLOSE: NZ shares gain; Restaurant Brands climbs on upbeat outlook
NZ dollar stalls after Bascand's rate cut comments
Bascand says RBNZ will consider changing bank capital proposals
Affordable electricity key to decarbonisation - Genesis
Graeme Hart trims global packaging empire with US$615m asset sale

IRG See IRG research reports