The Commerce Commission has issued new guidance for consumer lenders and borrowers to assist them during the COVID-19 pandemic.
“The Commerce Commission appreciates the serious impact that COVID-19 is likely to have on lenders and borrowers.
Lenders will want to provide additional support and flexibility to financially stressed borrowers at this time and the
scale of borrowers’ needs is expected to be unprecedented. Appropriate access to credit should be facilitated and
maintained while borrowers’ interests are also properly protected,” said Commission Chair Anna Rawlings.
Lenders must comply with the Credit Contracts and Consumer Finance Act 2003 which is enforced by the Commission. It
includes responsible lending requirements.
“We are providing guidance to lenders to assist them in complying with responsible lending obligations. The Commission acknowledges that the application of
the CCCF Act’s requirements will be informed by the circumstances in which lenders, acting reasonably, are operating
while COVID19 affects the New Zealand economy. Our approach to enforcing the CCCF Act during this period will also be
strongly informed by these circumstances,” said Ms Rawlings.
The Commission has also released a question and answer document for borrowers.
“We want to help borrowers by providing information to them about other options as well as loans. The other options
include Government financial support, and directing them towards services which can help them manage credit, such as financial mentors,” said Ms Rawlings.
The credit guidance to borrowers addresses likely key questions, including information about hardship and how to apply
for changes to loans to help with hardship, and providing information to help lenders to meet the responsible lending
requirements.
“Many people will need to take on more debt at this time, and we know that may be inevitable. However, we want to
provide as much information as we can to help people avoid becoming overwhelmed by debt,” said Ms Rawlings.
No business in New Zealand should feel constrained from doing the right thing for its customers, the safety of its staff
and New Zealanders. The Commission plans to take a pragmatic approach in relation to enforcement across all of the laws
that we enforce. We have provided some detail in specific areas:CompetitionMergersInvestigationsWhat we will not tolerateOther consumer and business guidance
In addition to the lender and borrower guidance referred to above, the Commission has issued other COVID-19 related
advice and guidance which can all be found on the
COVID-19 section of our website.Consumer rights FAQsDisrupted travel, events and tradeStaying connected during alert level 4
Advice and guidance will be updated as necessary.