Hon Scott Simpson
Minister of Commerce and Consumer Affairs

Last night the Government took a major step toward restoring common sense to financial regulation, with the first readings of three important reform bills, says Commerce and Consumer Affairs Minister Scott Simpson.

“Our Government is delivering on its promise to make it easier for New Zealanders to access the financial services they need, whether it’s buying a home, growing a business, or simply managing everyday life,” says Mr Simpson.

“For too long, New Zealanders have been trapped by rules that are overly bureaucratic, unnecessarily repetitive, and sometimes just downright silly. Today, we’ve begun to fix that.”

The Credit Contracts and Consumer Finance Amendment Bill, the Financial Markets Conduct Amendment Bill, and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill are the first legislative steps in a broader package aimed at rewiring New Zealand’s financial services regulation. Together, they form part of a comprehensive overhaul that will rebalance the system to ensure consumer protection without stifling access to credit or innovation.

“For many Kiwis, the absurdity of past rules became clear when banks were forced to quiz them about what they’d been spending on takeaways or Netflix subscriptions before approving a mortgage. That wasn’t responsible lending, it was regulatory overreach.”

These three bills focus on addressing some of the most counterproductive aspects of the current law:

• Regulators empowered to take proactive action: The Financial Markets Authority will be given the tools needed to effectively oversee lending, banking and insurance markets to the benefit of consumers.
• Removing unnecessary personal liability: Senior managers and directors will no longer face personal liability for compliance failures. Responsibility will sit with the businesses, where it belongs.
• Streamlining licensing requirements: Financial service providers will no longer need to hold multiple overlapping conduct licences, reducing duplication and compliance costs across the sector.
• Improving dispute resolution services: The Bill strengthens oversight and independent governance of financial dispute resolution schemes, ensuring Kiwis can have confidence in fair, effective support when things go wrong.
• A fairer and more proportionate approach to non-disclosures: Another change, which will apply retrospectively for the period between 2015 and 2019, will enable the courts to apply greater discretion when a lender has failed to disclose certain information to consumers.

“These changes are pro-consumer, pro-competition, and pro-growth. They ensure that financial institutions are held to account without being tied up in needless red tape that drives up costs for everyone.”

The reform package delivers on a core part of the National-ACT coalition agreement to rewrite the Credit Contracts and Consumer Finance Act 2003.

“These changes are about enabling our economy to flourish. Financial regulation should protect people, not block their ambitions. This progress means we’re one step closer to a more dynamic, fair, and accessible financial system for all.”

Notes:

Fact sheet for the Bills: Financial services reform package

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