Wednesday, May 22, 2024

Finance Act changes will improve safe access to credit says Minister

Minister of Commerce and Consumer Affairs, Dr Duncan Webb says changes to the Credit Contracts and Consumer Finance Act (CCCFA) set to come into force in May will improve safe access to credit for Kiwis.

The changes include:

  • explicitly excluding discretionary expenses from affordability testing;
  • providing more flexibility for lenders about how certain repayments are calculated;
  • extending exceptions from full income and expense assessments for refinancing of existing credit contracts.

“Whilst not departing from the original policy aim to ensure borrowers can repay loans without hardship, this tidies up the December 2021 changes to the CCCFA and Credit Contracts and Consumer Finance Regulations,” said Minister Webb (pictured).

MBIE released an exposure draft of the changes to the Regulations and Responsible Lending Code for consultation in September last year. The amendments made to the final regulations were informed by feedback from lenders, financial mentors and consumer advocates during the consultation period.

“This feedback was an extremely important step to ensure the workability of these final changes. I commend all stakeholders who were involved and shared their views. Thank you for your time and effort in helping us get this right.”

“It’s important that New Zealanders can access safe, responsible and affordable credit. That’s why we made the initial set of changes that came into effect on July 7, 2022. Coupled together with the changes I have announced today, I am confident we’re striking the right balance between ensuring Kiwis can access credit effectively, while also maintaining a strong level of consumer protection,” said Dr Webb.

The changes will be enacted from 4 May 2023.

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