Bill aims to regulate money lenders
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.