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.

BusinessDesk.co.nz

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
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:

Huawei committed to NZ even if govt doesn’t come around on spy fears
Mercury points to peaking gains as FY production drops 10%
Asset Plus sells Heinz Watties distribution centre for $29.1 mln
18th July 2019 Morning Report
COMMENT: RBNZ's key political omission in its bank capital proposals
ANZ and Westpac credit rating outlooks downgraded to 'negative' outlook: Fitch
MARKET CLOSE: NZ shares edge higher in quiet trading; weaker currency buoys exporters
NZ dollar stalled amid uncertainty about US rate cuts
RBNZ a 'poor communicator' - CBL's Harris
Methane reduction target could be catastrophic - Fonterra Shareholders' Council

IRG See IRG research reports