Bill aims to reg­u­late money lenders

Auckland City Harbour News - - NEWS -

Loan sharks tar­get­ing the vul­ner­a­ble and des­per­ate will soon be held ac­count­able if MP Pe­seta Sam Lotu-Iiga has his way.

He’s been push­ing for the leg­is­la­tion for al­most five years now and is pleased to say it’s one step closer to be­ing re­al­ity.

The Con­sumer Credit and Fi­nan­cial Ser­vices Law Re­form Bill was in­tro­duced by Min­is­ter of Con­sumer Af­fairs Craig Foss on April 18.

The bill in­cor­po­rates many as­pects of Mr Lotu-Iiga’s pri­vate mem­ber’s bill from 2011. The aim is to estab­lish a code of re­spon­si­ble lend­ing.

Mr Lotu-Iiga says there are too many ‘‘preda­tory’’ lenders op­er­at­ing in some of Auck­land’s poor­est com­mu­ni­ties and leav­ing fam­i­lies in a spi­ral of debt.

Some com­pa­nies take per­sonal pos­ses­sions such as pass­ports and chil­dren’s toys as col­lat­eral for the loans.

‘‘I have seen it in my own com­mu­nity. A lot of peo­ple have been re­ally hurt by this and we need a law to pro­tect them.’’

‘‘We’re try­ing to pro­tect vul­ner­a­ble con­sumers.

‘‘Lenders will have to take into ac­count the cir­cum­stances of the bor­rower.’’

Mr Lotu-Iiga is on the se­lect com­mit­tee which worked with bud­get ser­vices pro­fes­sion­als and so­cial work­ers to de­ter­mine the most im­por­tant as­pects of the bill.

The bill will make changes to the al­lowed ad­ver­tis­ing of loans and li­cens­ing of re­pos­ses­sion agents.

Lenders will only be able to give loans when the in­ter­est pay­ments won’t cause sub­stan­tial hard­ship for the bor­rower.

The con­trols will pro­vide com­mu­ni­ties with more fi­nan­cial se­cu­rity, Mr Lotu-Iiga says.

He is call­ing for feed­back on the bill and says it will af­fect any New Zealan­der who is con­sid­er­ing a loan.

‘‘It’s a re­ally im­por­tant bill. It’s about lim­it­ing these col­lec­tors and look­ing at what they can ac­tu­ally do. Peo­ple are co­erced into these loans and then they suf­fer.’’

Mr Lotu-Iiga hopes to see the bill passed within the year.

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