Minister of Commerce and Consumer Affairs David Clark has bought forward an enquiry into the CCCFA to see if it is being implemented as intended.
TMM and TMMOnline has been reporting about concerns over the new law for months. Since then numerous stories have appeared in media claiming the CCCFA is too onerous.
Clark said tonight: "Whilst we are in the early days of new regulations to protect vulnerable borrowers, I have asked the Council of Financial Regulators (COFR, comprising the Reserve Bank, the Treasury, Financial Markets Authority, MBIE and Commerce Commission) to bring forward their investigation into whether banks and lenders are implementing the CCCFA as intended."
"Banks appear to be managing their lending more conservatively at present, and this is likely due to global economic conditions.
Clark said that "a number of factors affecting the market have occurred at the same time as the CCCFA changes", with those including increases to the Official Cash Rate (OCR), Loan-to-Value (LVR) changes and an increase in house prices and local government rates.
"An investigation by COFR will determine the extent to which lender behaviour, in respect of the CCCFA, is a significant factor in changes to banks' lending practices," Clark said.
Since the laws came into effect on December 1, mortgage adviser John Bolton from Squirrel has launched a petition seeking a review. His is seeking 10,000 signatures and is sitting at 9,662 on Friday night. Financial Advice NZ has requested a meeting with the minister and the Act Party has been campaigning on the law - even though its party leader David Seymour, was part of the Select Committee which reviewed the bill.
Seymour says it was "welcome news" that an enquiry has been ordered but it "must be real".
Clark supported the law at its start date in December saying: "Today's changes require all lenders to complete thorough checks to ensure loans are suitable and affordable for their customers, preventing them from getting into debt they simply cannot afford.
"It's vitally important to protect people and whānau from falling into the trap of taking on unaffordable debt, and to stop those who take advantage of those in vulnerable circumstances."