Easing rules to boost lending
The banking industry is applauding the government’s decision to remove affordability regulations under the Credit Contracts and Consumer Finance Act (CCCFA) and update the Responsible Lending Code.
These changes aim to improve access to lending and provide more flexibility for banks.
Improved access to lending
Roger Beaumont (pictured above), chief executive of the New Zealand Banking Association (NZBA), praised the move.
“We are pleased to see the removal of overly prescriptive affordability assessments,” Beaumont said. “This will help fix the one-size-fits-all approach that treated all types of lending and borrowers the same.”
Responsible lending maintained
Beaumont said banks continued to be committed to responsible lending.
“Banks are responsible lenders and take their obligations under the law and to their customers seriously,” he said. “The change still means that consumers are protected, and lenders need to be responsible.”
Flexibility for banks
The removal of stringent regulations and the update to the Responsible Lending Code are expected to bring back flexibility and discretion for banks, especially in emergency situations.
“Removing the overly prescriptive regulations and updating the Responsible Lending Code will help bring back flexibility and discretion for banks to help customers,” Beaumont said.
Engaging with the government
Beaumont sees this as a positive step forward and looks forward to further collaboration:
“This is a good first step in the process of amending the CCCFA. Banks look forward to engaging with the government in the next phase,” he said.
The banking sector anticipates that these changes will make it easier for consumers to access loans, while still maintaining essential protections and responsible lending practices.
Read the NZBA announcement here.
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