Robertson defends CCCFA changes
The Minister of Finance has mounted a defence of the Credit Contracts and Consumer Finance Act (CCCFA).
Monday, December 6th 2021, 12:30PM 
6 Comments
by Eric Frykberg
Grant Robertson was speaking at a virtual conference organised by the Financial Services Council.
The leadup to the CCCFA produced strong opposition from mortgage advisers and others for being unclear, expensive to administer and requiring too much paperwork for little real gain.
Critics added it caught up legions of respected lenders in its campaign against small numbers of predatory loan sharks.
But Robertson told the conference the law was needed.
“It was really put in place to ensure we retain those really high standards of integrity that we have. Banks have been pretty careful with their lending during the Covid period but we still need to make sure the rules are fit for purpose and up to date.
“We have had the IMF and others come through over the last few years and make pretty serious recommendations about how we really do need to improve the settings (for the loans industry).
“We did our best to mitigate the damage that might be caused by this, but I think overall it is going to be good for the financial sector.”
Robertson also rejected the argument that the CCCFA would hamper the economic recovery by making it harder for people to borrow money to help their way out of a crisis.
He said no one could argue there had been any shortage of money flowing about the economy in the last 20 months, but he conceded there might be some retreat from that due to changes such as tougher LVR rules on housing.
The Minister for Commerce and Consumer Affairs David Clark also spoke to the conference.
He suggested obliquely that the Government might listen to complaints about the CCCFA, though he made no promises and did not mention the law by name.
“The Government recognises legislative change of the scale we have seen recently results in substantial organisational change for the industry,” Clark said.
“I am acutely aware of that, and acknowledge the challenge this presents to many of you, particularly during the pandemic. “I want to assure you that the Government will be keeping these pressures and challenges in mind in planning future work programmes.
Please continue to reach out to me and my officials with any concerns and please continue to provide submissions on any issues that we seek your views on.”
Neither Minister faced questions from anyone in the industry during the conference.
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Comments from our readers
Yet the CCCFA has missed the target completely. Finance companies and BNPL providers are making big enough profits to ride out any penalties while they continue their immoral practices unchallenged.
Says it all....
They tell me they finally have a decent supply of new listings available but the number people actually attending open homes has dropped significantly. Reason? Purchasers who have been looking at properties for months now can't get their finance reapproved at their bank up to the levels they need to make competitive offers. In some instances purchasers borrowing power has been slashed by $200,000 due to the new CCCFA changes introduced.
Mr Robertson & Mr Clark with the usual arrogance that typifies this Government have no comprehension of the impact these CCCFA changes are having on first home buyers trying to get a foothold on the property ladder. As mentioned by Andy above this will only result in pushing property ownership into wealthier people's hands.
So much for Labour saying their focus is on addressing the current imbalance in the housing market. Well at least we have kept the IMF happy which is all that Mr Robertson seems to care about.
Presumably this Government which seems so risk adverse understands what happens to the New Zealand economy if people and businesses in particular can't access credit?
The condescending nature of Mr Robertson and Mr Clark's comments above at the conference insult all New Zealanders. Mr Clark in particular.
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