The Government needs to stop trying to save face and admit it made a mistake with its overly prescriptive, one-size-fits-all credit rules, which are making it harder for would-be home buyers to get a mortgage, National’s Housing spokesperson Nicola Willis and Commerce and Consumer Affairs spokesperson Andrew Bayly say.

“We doubt the changes announced today will fix the problems being faced by everyday people trying to get mortgages,” Ms Willis says.

“We continue to think the Government’s heavily regulated, one-size-fits-all approach creates too much red tape for borrowers and banks alike.”

Mr Bayly says that Parliament passed the CCCFA amendments in order to crack down on predatory lending practices that could harm vulnerable consumers, but they were never intended to capture banks and credit unions.

“That’s why the legislation provided for a different approach to be taken to different types of lenders.

“For some reason, the Minister chose to issue highly prescriptive regulations late last year that applied to all types of lender, including highly regulated banks and credit unions.

“This was the crucial mistake made by the Minister, but the changes announced today still fail to recognise that there is a fundamental difference between a highly regulated lender and a high-cost lender servicing vulnerable clients.”

“When this problem first came to light, National immediately drafted a member’s bill that would have fixed the problem.

“Our bill would require the Minister to issue separate regulations for different types of lender. It would also require those regulations to take account of the scale and risk profile of different types of lender.

“We also wrote to the Minister and offered to work with him to get this bill passed urgently. He refused and now, more than a month later, he has offered up some minor tweaks that are highly unlikely to fix the problems being faced by everyday people trying to get mortgages.

“The Minister has put off making any real changes to this flawed legislation while he waits for yet another review to report back.

“That’s too long to wait for the thousands of Kiwis who are struggling to get a foot on the property ladder and are being disadvantaged by his lack of urgency. Dr Clark needs to face up to his mistake, and take real action to fix it right now.”

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