Credit Unions Applaud Consumer Credit Law Reform Bill

23 April 2013

FOR IMMEDIATE RELEASE

Credit Unions Applaud Consumer Credit Law Reform Bill

The industry organisation representing credit unions and mutual building societies in New Zealand applauds the changes introduced last week by Consumer Affairs Minister Craig Foss to improve consumer protections against unscrupulous lenders.

New Zealand Association of Credit Unions (NZACU) Chief Executive Henry Lynch says “Changes required to protect vulnerable consumers from the predatory loan-shark behaviour prevalent in low-income areas are very welcome at last”.

“We understand there are political differences how best to combat loan sharks but we implore everyone in the House to work together to get a legislative solution in place soon” says Mr. Lynch.

“Every day there are struggling families paying money they can hardly afford in extra loan payments. Interest rates of ‘8% per week’ are often advertised to entice people to borrow, but when this is annualised, it means many unsuspecting borrowers end up paying well over 400% per annum” Mr Lynch said. “That means a family with an average $1,000 loan could be paying as much as $4,000 or more over a year in interest simply due to a poor financial decision they have been induced to make.”

Cooperatively owned credit unions and mutual building societies in New Zealand currently have over 210,000 members, and have a long history of helping people from all walks of life achieve better financial management.

“Our Member credit unions and building societies are focused on improving the financial situation of their members, and that often involves consolidating high-interest debts to manageable levels whilst instilling a healthy, long-term savings habit” said Mr Lynch.

Notes:

New Zealand Association of Credit Unions (NZACU):
Credit unions and mutual building societies are co-operatively owned financial service providers, providing their members with a similar range of services to a bank. Credit unions and building societies are all independently owned and operated by their members for their members, and any profits are returned to the members in a combination of ways i.e. fairer fees, interest rates and community involvement.

NZACU is the industry association for credit unions and building societies and exists to represent, promote and support its 23 Member credit unions and mutual building societies, providing cost-effective business services. NZACU's members employ over 550 staff, represent 210,000+ members, with more than 95 branches, assets of over $1.27 billion and collectively are the sixth largest financial transactor by volume in New Zealand. NZACU also wholly own Credit Union Insurance Ltd, a fully licensed insurance provider, under the Insurance (Prudential Supervision) Act 2010.

The NZACU is a member of global trade association WOCCU, the World Council of Credit Unions, which represents over 188 million people in 100 countries across the globe. This international network operates under the vision: “Improving people's lives through credit unions” and promotes the sustainable development of credit unions and other financial cooperatives around the world.

W www.nzacu.org.nz

ENDS

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