Industry leader welcomes changes to the lending laws but wants details and timeline for the implementation
Financial Advice NZ has called for the minister to review the unintended consequences of the CCCFA regulations which came into effect on Dec. 1 and have made it more difficult for average Kiwis to secure home loans.
David Clark, commerce and consumer affairs minister, announced a range of small changes to the responsible lending rules last week, in response to a number of New Zealanders who were unable to obtain credit which they would have been able to access previously.
Katrina Shanks, CEO at Financial Advice NZ, said they were pleased with these initial changes and looks forward to seeing the detail and timeline for the implementation.
“We have reported that mortgage advisers have seen a significant reduction in pre-approvals not being renewed as well as reduced lending levels to all borrowers due to the new requirements of the CCCFA almost as soon as it was enacted,” Shanks said. “It is important the minister acts with speed to implement the changes announced today so Kiwis who genuinely have the ability to service credit are able to access it. We also look forward to seeing the outcome of the minister’s continued investigation and call for the implementation of all changes as soon as possible.”
Shanks said the industry body acknowledges the intent of the legislation to protect vulnerable borrowers, and that the CCCFA reducing the availability of credit for Kiwis was an unintended consequence.
“We continue to believe the changes to the CCCFA, are a significant contributor to the average Kiwi not being able to obtain the same levels of credit they could prior to December 2021,” Shanks said. “Financial Advice NZ will continue to advocate for Kiwis to be able to obtain credit where it is reasonable and suitable for their circumstances.”
