CCCFA changes delayed

The Financial Services Federation and NZ Bankers Association had asked the minister to push back the start date of the CCCFA changes due to Covid-19.

The Ministry of Business, Innovation and Employment (MBIE), today sent out an email saying "Cabinet has decided to extend the compliance date for most of the new Credit Law changes."

It has delayed some other legislative changes too,

"Of significance to lenders and borrowers, the Government has agreed to a short delay to the full commencement of the Credit Contracts Legislation Amendment Act 2019 (the Amendment Act) by two months, to 1 December 2021.

"This is considered necessary due to the impact of recent Covid-19 alert levels on lenders’ implementation of the reforms, which has disrupted training and other preparations and forced a reprioritisation of resources to support existing customers. This delay will include the regulations that were due to come into force on 1 October 2021, such as the Credit Contracts and Consumer Finance (Lender Inquiries into Suitability and Affordability) Amendment Regulations 2020."

The Commerce Commission says the new certification requirements will still come into place on October 1 and "the Commission's guidance for when lenders need to be certified still applies."

"Lenders will now have until 1 December 2021 to comply with the remaining changes in relation to responsible lending, due diligence, disclosure, and fees and advertising requirements," it says.

"The Government remains committed to implementing the credit reforms in a timely manner for the benefit of consumers," the MBIE email says. "Decisions around a delay have not been made lightly, and the Government has a strong expectation that the Credit Contracts and Consumer Finance (Lender Inquiries into Suitability and Affordability) Amendment Regulations 2020 be implemented by no later than 1 December."

The new Responsible Lending Code will be updated to reflect the new start date. The Commerce Commission will also be updating its guidance.

MBIE says it will shortly undertake a brief public consultation on reissuing the addendum to the Responsible Lending Code, which elaborates on and offer guidance on how lender responsibility principles and lender responsibilities may be implemented by lenders while dealing with borrowers who have been impacted by Covid-19.