Andrew Bayly: Commerce and Consumer Affairs Minister on the removal of the affordability regulations from the Credit Contracts and Consumer Finance Act

New Zealanders will soon be able to access finance with confidence. 

From today, the Government's removing the affordability regulations from the Credit Contracts and Consumer Finance Act and updating the Responsible Lending Code.  

Commerce and Consumer Affairs Minister Andrew Bayly says they're revoking 11 pages of overly prescriptive affordability regulations introduced by the last government. 

He told Mike Hosking it had impacted the most vulnerable when they needed finance the most. 

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Episode Transcript

Speaker 1 (00:00):
Homelans, another lending should become a little bit easier. As
of today, we've got changes to the Fame Triple CFA,
that cock up from David Clark, the Credit Contracts and
Consumer Finance Act, Commerce and Consumer Affairs Minister these days.
Andrew Baileys with it's Andrew, very good morning to you.

Speaker 2 (00:14):
Hey, good morning, Mike.

Speaker 1 (00:15):
It's not like this hasn't been messed with over and
over and over again. Have we messed with it one
last time?

Speaker 2 (00:21):
Well? Yes, I think so.

Speaker 3 (00:22):
We're removing eleven pages of overly prescriptive stuff out of
the requirements, and that's going to make it easier for
people to be able to get finances.

Speaker 2 (00:32):
That's the bottom line of what we want to try
and achieve.

Speaker 1 (00:34):
Are you still protecting those who were supposed to be
protected in theory in the first place.

Speaker 2 (00:39):
Oh yeah, that's always been the case.

Speaker 3 (00:42):
I've always been concerned about making sure that people are
not getting ripped off, and so you know, there's still
this strong underlying requirement that people have to do proper
affordability tests if they think it's necessary. They can't get
away without. There's high penalties. And I've also looked to
strengthen up the dispute mechanism. I've standardized or sput mechanisms

(01:03):
can now ward damages up to five hundred thousand.

Speaker 2 (01:05):
So we're and I'm looking to do a little bit
more around that.

Speaker 3 (01:08):
But it is a balancing act between making sure people
can get access to credit easily and also making sure
that people are not getting subject to bad practices.

Speaker 1 (01:18):
Are the banks on board because the bank screened and
said this isn't going to work, clack didn't listen. Are
they on board now?

Speaker 2 (01:24):
Oh? Very much so.

Speaker 3 (01:25):
And also during the process, I've involved a lot of
the consumer advocacy and budgeting people.

Speaker 2 (01:30):
I've actually had them.

Speaker 3 (01:31):
They've been party to developing the Responsible Learning cobutch. We've updated,
so you know, I've always tried. I've tried to balance
it across across post areas. So people want finance people
or lending people want this.

Speaker 2 (01:47):
I'll give you an example.

Speaker 3 (01:47):
I went to tear moved to a great protuential town,
and I spoke to a land of there and I said,
how long does it take you the process.

Speaker 2 (01:53):
Of five hundred dollars alone? And they said, what is
to take one to two hours?

Speaker 3 (01:56):
Now it takes eight to ten hours, And the last
time I spa some a couple of months ago, they
had put their minimum amount that you could borrow three
thousand bucks. So you mentioned a few you can't breaks
down overnight and you've got to get the kids to
school tomorrow and you need six hundred bucks. What the
hell you did? You go you you couldn't go to
and you wanted to get that small amount of money.
And we're not talking about people like you don't need it.

(02:18):
We're not talking about people who've got more overdrift facilities
sitting around they can just call on. These are vulnerable newsalanders.
So that was the worst thing. That was a pernicious
thing that these rules did. They actually made it hard
for the most vulnerable key people at a time when
they really needed finance.

Speaker 1 (02:34):
Exactly. Glad you fixed it. Hopely it works. Andrew, appreciate
your time. Andrew Badley, the Commerce and Consume Affairs Minister,
with us this morning.

Speaker 3 (02:41):
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