Robertson defends CCCFA changes

The Minister of Finance has mounted a defence of the Credit Contracts and Consumer Finance Act (CCCFA).

Grant Robertson was speaking at a virtual conference organised by the Financial Services Council.

The leadup to the CCCFA produced strong opposition from mortgage advisers and others for being unclear, expensive to administer and requiring too much paperwork for little real gain.

Critics added it caught up legions of respected lenders in its campaign against small numbers of predatory loan sharks.

But Robertson told the conference the law was needed.

“It was really put in place to ensure we retain those really high standards of integrity that we have. Banks have been pretty careful with their lending during the Covid period but we still need to make sure the rules are fit for purpose and up to date.

“We have had the IMF and others come through over the last few years and make pretty serious recommendations about how we really do need to improve the settings (for the loans industry).

“We did our best to mitigate the damage that might be caused by this, but I think overall it is going to be good for the financial sector.”

Robertson also rejected the argument that the CCCFA would hamper the economic recovery by making it harder for people to borrow money to help their way out of a crisis.

He said no one could argue there had been any shortage of money flowing about the economy in the last 20 months, but he conceded there might be some retreat from that due to changes such as tougher LVR rules on housing.

The Minister for Commerce and Consumer Affairs David Clark also spoke to the  conference.

He suggested obliquely that the Government might listen to complaints about the CCCFA, though he made no promises and did not mention the law by name.

“The Government recognises legislative change of the scale we have seen recently results in substantial organisational change for the industry,” Clark said.

“I am acutely aware of that, and acknowledge the challenge this presents to many of you, particularly during the pandemic. “I want to assure you that the Government will be keeping these pressures and challenges in mind in planning future work programmes.

Please continue to reach out to me and my officials with any concerns and please continue to provide submissions on any issues that we seek your views on.”

Neither Minister faced questions from anyone in the industry during the conference.

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