Reforms to ease credit access
The Financial Services Federation (FSF) has welcomed the government’s recent announcement of reforms aimed at improving access to responsibly provided credit for New Zealanders, especially through specialist non-bank lenders.
The FSF, which represents 1.7 million consumers and businesses served by non-bank lenders, highlighted two key changes: the removal of personal liability for directors and senior managers, and the transition to a licensing model for consumer credit providers.
Liability shift eases pressure on lenders
The removal of personal liability for directors and senior managers is seen as a significant move to encourage competition in the financial services sector.
“This has impacted the risk appetite for lenders, particularly smaller ones, and we are pleased the government is addressing this,” FSF executive director Lyn McMorran (pictured above) said.
McMorran added that the previous liability regime acted as a “deterrent for good people to enter the sector” and limited competition against banks. She stressed that “lenders will still have robust responsible lending obligations,” ensuring consumer protection remains a priority.
Transition to licensing model
In response to the government’s decision to shift consumer credit regulation to the Financial Markets Authority (FMA), McMorran said that FSF is “not opposed in principle” but cautioned that “the devil will be in the detail.”
McMorran stressed the need for proportional compliance costs, particularly for smaller lenders, and expressed FSF’s intention to closely monitor developments during the consultation period.
FSF looks forward to hearing from Minister Andrew Bayly and FMA chief executive Samantha Barrass at its conference on Oct. 22, where these reforms will be further discussed.
See LinkedIn post here.
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