MBIE gives timeline for CCCFA reforms

The next stage in the reform of the Credit Contracts and Consumer Finance Act (CCCFA) Regulations and the Responsible Lending Code will be made public early next month.

Friday, March 25th 2022, 5:59PM 2 Comments

by Eric Frykberg

But it will not be the last word – it will be a draft of the proposed reforms and the lending industry will be asked to make comments on them before formal implementation of the changes in June.

This has been revealed by the Ministry of Business Innovation and Employment (MBIE) following concerns by brokers that reforms were promised two weeks ago but nothing has happened since.

The saga originated in complaints that the CCCFA was throttling the finance industry in expensive red tape.

It was also causing dependable borrowers to lose access to money they were counting on and which would previously have been granted without any drama.

These complaints grew so loud than the Minister of Commerce and Consumer Affairs David Clark was forced to review the rules less than two months after they were implemented.

On March 11, Clark announced the first of a two tranche series of reforms.

This first tranche included ending the need for lenders to trawl through bank statements looking for money spent on lattes or takeaways, as long as robust financial information was already available.

It also included ending the practice of adding money spent on savings or investments to the sum of weekly living costs.

But after Clark made these announcements, not much was heard and lenders continued doing the job in the old way.

Asked about this apparent delay, MBIE said there had been no 'directive’ to industry to comply with the changes.

Instead, officials were working on regulations to implement the agreed changes and these would be ready for public consultation early next month.

After that, a final version would be ready for implementation in June.

MBIE stressed this development concerned only the first tranche of reforms, a second tranche is still being examined by officials.

Tags: CCCFA

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Comments from our readers

On 26 March 2022 at 2:49 pm w k said:

i think all has already been decided even before going through the motion of "feedback, submissions, consultations, seminars/workshops, etc", and it has always been a i hear you, but i'm not listening because i know best attitude. otherwise this sort of things would not happened time and time again, and this will not be the last time.

this is different from a dietician telling a surgeon the "correct" surgical procedures.

please tell us, those who write up these regulations, how many years of practice do they have in sales and advisory roles?

On 6 April 2022 at 3:17 pm two cents said:

Seriously, how can you hold your head up, Minister? Zero accountability for the havoc you caused by your total lack of understanding is deplorable. Meanwhile, advisers get 3 to 6 more months of negotiating this crap while media headlines blare: "All is Well and Fixed!" Thanks a big fat lot. We know your political bread is buttered on re-election and kowtowing to banks you help make squillions. Don't count your chickens just yet.

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