Changes to consumer credit legislation in New Zealand

Author:Mr Scott Whitaker and Struan McOmish
Profession:Duncan Cotterill
 
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The Credit Contracts Legislation Amendment Act 2019 (Act) became law on 19 December 2019. The Act amends the Credit Contracts and Consumer Finance Act 2003 (CCCFA) and introduces some significant changes which will affect all lenders providing consumer credit in New Zealand.

The key changes introduced are:

The existing lender responsibility provisions in the CCCFA have been extended and strengthened. All lenders will be required to comply with certain minimum requirements set by regulation in carrying out an assessment as to a loan's affordability and suitability. Lenders will also be required to keep records that substantiate that loans are affordable and suitable and that fees are not unreasonable. A requirement for all advertising to comply with new advertising standards, which will be set by regulation. A fit and proper person test for directors and senior managers of creditors and mobile traders. The introduction of new personal duties on directors and senior managers and tougher penalties for breaches of the CCCFA. Disclosure obligations at the commencement of debt collection. The introduction of an "annual return" regime requiring lenders to...

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