CCCFA The Slow Boat

The Council of Financial Regulators has released the Investigation Report “Early implementation and impacts of 1 December 2021 credit law reforms”.

“This report provides options but they require more consultation. Implementation is not until March 2023 - 14 months after significant unintended consequences of the CCCFA were identified. We believe this gap is too long,” says Financial Advice NZ chief executive Katrina Shanks.

“The potential changes identified in the report will make some difference, such as the need to be more targeted to specific kinds of lending and lenders, or certain consumers where there is a higher underlying risk of substantial hardship.

‘We believe to move the dial significantly a change has to be made to the legislation in relation to the penalties and liability regime. This would reduce the onerousness of due diligence duties of directors and senior managers the December 2021 legislation created.

“The potential change to ‘narrow’ expenses considered by lenders is positive. We are also encouraged to see proposals to relax some assumptions that lenders are required to make about buy now, pay later and credit cards. Changes helping make debt consolidation more accessible if appropriate for borrowers is also a step in the right direction.

“We are supportive of the areas identified for change in the report and will work with officials to ensure the correct changes are identified so that Kiwi’s to be able to obtain credit where it is reasonable and suitable for their circumstances.

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