The Financial Services Federation (FSF), the lobby group for non-banking financial institutions, is unimpressed with the National Party’s idea to exclude banks from the Credit Agreements and Consumer Credit Law (CCCFA), but to continue to apply it to the building of FSF civil society members, credit unions and finance companies.
National Chief Christopher Luxon, and Deputy Chief and Finance Spokesperson Nicola Willis, both spoke of a desire to exclude banks from the CCCFA this month. Luxon at a Finance Advice NZ conference in Christchurch, and Willis in an interview.
FSF executive director Lyn McMorran told interest.co.nz that while the CCCFA is “a complete and utter mess”, National’s idea is no good.
“We are not at all comfortable with the idea that there is one rule for one set of lenders and one for another. I think that an eventual government should not come up with something that creates an advantage competitive for one group over another,” McMorran said. said.
“Our members represent 1.7 million New Zealanders…so it almost suggests that those 1.7 million New Zealanders aren’t as important as bank customers. So we’re not happy with the idea at all. .”
McMorran said the FSF agrees that the CCCFA, which it describes as “a complete and utter mess,” needs to be fixed because it is too prescriptive. But the answer is not to exclude a group.
“We don’t even like the idea of a temporary ban on banks until the next election,” McMorran said.
She added that National would not have the numbers in parliament to make the change before next year’s election, and was unsure what the party’s priorities might be if it ran a government after the election. .
Speaking in Christchurch, Luxon said: “The CCCFA is getting in the way – worsening access to credit without making our financial system sounder. That’s why we are committed to rewriting the legislation to ensure that predatory lending to high risk are targeted, without dragging major commercial lenders into the net of unnecessary rules and regulations.”
Meanwhile Willis said good feedback“Banks are by nature and experience experts in this field. They have been doing this for decades, even hundreds of years. And it is not in their interest to lend to people who cannot repay. So what we have proposed is that there should be a differential in the regulatory regime, where commercial banks that are governed by Reserve Bank prudential frameworks should have a much less prescriptive regulatory regime in terms of consumer credit and financing than your second-tier lenders.”
The Reserve Bank’s regulations on banks, non-bank deposit taking institutions and insurers do not include oversight of consumer protection laws. Rather, the Reserve Bank is the prudential regulator overseeing a legal framework focused on the financial security and stability of institutions and the broader financial system.
Highlight the changes made to the CCCFA that came into force on December 1 of last year, Trade and Consumer Affairs Minister David Clark says unfair lenders have been taking advantage of Kiwi consumers for too long and New Zealanders can expect better protection against high-cost loans and unaffordable debt . However, critics were less than impressed, saying there was no problem to fix and the new rules were too prescriptive.
Following a decline in consumption of consumer debt and mortgages, the government subsequently changed regulations twice. First of all in Marchand even in August. The Ministry of Business, Innovation and Employment open consultation Thursday.
FSF members include Avanti Finance, Finance Now, owned by SBS Bank, First Credit Union, Geneva Finance, Instant Finance, Latitude Financial, Nelson Building Society, Resimac, Toyota Finance and UDC Finance.
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