Jenee Tibshraeny: NZ Herald Wellington business editor on David Seymour removing regulations for buy now, pay later sector

The Government has confirmed buy now, pay later providers will be able to charge whatever fees they want going forward.

Cabinet has agreed to remove some consumer protections from the Credit Contracts and Consumer Finance Act (CCCFA) to enable BNPL providers to set late or default fees at whatever levels they wish.

NZ Herald Wellington business editor Jenee Tibshraeny explains what this could mean for Kiwi consumers.

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Episode Transcript

Speaker 1 (00:00):
Now we've got the first example of David Seymour's Ministry
of Regulation pulling another minister into line. Buy now, pay
later providers will be allowed to charge whatever fees they
want after Cabinet decided to exempt them from the credit
contract and consumer finance. Basically, Cabinet decided to side with
David Seymour and not Andrew Bailey. Janative Trainey is The
Herald's Wellington Business editor. Hey you name? Hey, Yeah, how

(00:21):
did how did David Seymour get them to side with him?

Speaker 2 (00:24):
Well, that's a good question and I think it is
pretty significant because you know, David Seymour, Minister for Regulation,
his advice that he gets from the new Ministry for
Regulation gazumps the advice of MB and the Commerson Consumer
Affairs Minister Andrew Bailey, the experts in consumer affairs issues

(00:45):
like around buy now pay later, So you know the
effects of this could be quite big. Buy now, pay later.
The way it works is you got you go and shop,
you buy something and then you repay the money in installments,
so you don't pay any interest, but if you miss
a payment you pay a big fee. So what I
think the government recognizes is that that model is quite

(01:06):
different to traditional debt, so like quite different to a
credit card or something like that where you're paying interest.
So the argument is we'll buy now, pay later, shouldn't
be put under the exact same rules as the banks
and the credit cards that they issue, for example. Everyone
agrees on that, but Andrew Bailey thought, hey, we still
need to put some rules around the fees that these

(01:27):
buy now, pay later providers are charged, because you know,
we don't want to sort of just just let them,
let them have complete free reign. And David Seymour, you know,
i'd act leader ideologically doesn't love a lot of regulation.
He said, no, let's just let the market sort it out.
You know, these providers can't hike fees too much because

(01:47):
if they do, they'll lose their customers. So let's just
leave them to it. And David Seymour won.

Speaker 1 (01:52):
Now, Janey, it's the second time in a matter of
literally days that David Seymour has overridden Andrew Bailey on
something becase. The other one was also the supermarket regulation.
Do we know whether David is doing this out of
actual ideological purity or is he using Is this some
sort of political horse trading going on? Here.

Speaker 2 (02:12):
Well, that's a good question, and it might be a
bit of both. Really, you know, I think this is
always the challenge with political parties in a coalition. They
need to keep their voters happy and differentiate themselves from
the major party, in this case, National that they're in
a coalition with. So I think it may well be both.

(02:32):
I have no doubt that ideologically David Seymour prefers to
take hands off approach. You know, he believes that you
intervene too much and you distort the market and actually,
you know, yeah, just just let let competition do its thing.
But at the same time, you know, he's a good
politician and it really almost seems like he enjoys, you know,

(02:57):
ribbing his coalition partner a little bit. It was interesting
because Christopher Luxon was asked about this and post cabinet
press conference earlier this week, because David Seymour came out
and said, you know, leave, leave the supermarkets alone. They
don't need to be regulated more, even though Andrew Bailey said,
look what, we're open to regulating the supermarkets more heavily,

(03:20):
and Christopher Luxon just shot down a question. He was
pretty snappy when asked about it. And he said what
did he say? Said something to the effect of right,
Andrew Bailey is the Commison, Consumer Fires Minister, full stop.
Let me be really clear. So yeah, I think it's
you know, I think this is kind of an amusing situation,
but it's the way the systems set up, how EMP works.

(03:44):
It makes for a bit of entertainment for us at Yes.

Speaker 1 (03:46):
I don't mind a bit of friction in there because
usually grind out the stupid ideas like that. Hey, thank
you very much much really appreciated. That's Janative trainee, who's
the Wellington Business Editor. For more from Heather Duplessy Allen
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