Feedback sought on Responsible Lending Code

Consumer Affairs Minister Craig Foss is inviting feedback on the Credit Contracts and Consumer Finance Amendment Act’s Responsible Lending Code.

“Rewriting our consumer credit laws was a giant leap forward for lending practices in New Zealand,” Mr Foss says.

“Lenders must now operate with skill, care and diligence in all dealings with a borrower throughout the life of a credit contract.

“Adopting a Responsible Lending Code will increase protection for borrowers without imposing unnecessary compliance costs on lenders who already have good systems in place.”

All lenders must comply with the lender responsibility principles outlined in the Act, including:

• helping a borrower reach an informed decision about whether to agree to a loan
• making reasonable enquiries to ensure the borrower can make repayments without suffering substantial hardship
• treating borrowers and their property reasonably, with respect and in an ethical manner
• ensuring the terms of the agreement and the exercise of powers by the lender are not oppressive
• meeting all legal obligations to the borrower

“I look forward to feedback on what guidance should be included in the Code to establish market best practice,” Mr Foss says.

Submissions close 13 August 2014.  The Code is expected to be in place by March 2015.

To make a submission visit: http://www.consumeraffairs.govt.nz/legislation-policy/changes-to-credit-laws