Banks to be removed from CCCFA under National

National Party leader Christopher Luxon has proposed removing the major banks from the Credit Contracts and Consumer Finance Act (CCCFA) if elected.

While that was done, work would get underway in crafting a new and better law as a final replacement. 

He says it would not be a risky venture because those banks were already well regulated.

The change would happen if the party won the next election, but in the meantime a Private Members bill from the party’s commerce spokesperson Andrew Bayly was putting forward the same idea. 

Luxon was speaking to about 500 business professionals at the annual conference of Financial Advice NZ. in Christchurch.

He was commenting after months of controversy over government reforms such as the (CCCFA) and the Financial Markets (Conduct of Institutions (COFI) Act. 

These have been criticised by many in the industry, but the CCCFA in particular has been  accused of smothering the mortgage industry in hours of expensive and unproductive paperwork.

Luxon’s deputy, Nicola Wilis has already pledged reforms to the CCCFA, by changing the regulations.that were issued under the Act.

Speaking further about this, Luxon said, there could be immediate relief to the pressures caused by the law. 

He said the major banks were already well regulated by the Reserve Bank among other institutions and could be taken away from the CCCFA’s immediate coverage without endangering consumer protection law.

He told his audience the CCCFA was a “dumb” piece of legislation, it was poorly drafted,  and could be easily fixed.  

“Today, you could go into Parliament and pass a law under urgency and take off the table those 18 banks that the Reserve Bank monitors …. and then get on with drafting proper legislation.”

Interviewed outside the conference, Luxon made clear this was a short term fix which would be followed by thorough work on a final replacement to the CCCFA.

‘In the meantime, to get liquidity moving, what we have been suggesting right from the first time we saw this legislation come through in its final form is, let’s pass an amendment that would release those banks from the CCCFA.”

Luxon said this proposal would not apply to non-bank lenders, nor to mortgage advisers.

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