Government Review of New Zealand Lending Laws

In mid 2018 the New Zealand government announced a review of the Consumer Credit Laws and then called for submissions from all stakeholders by August 1, 2018.

See the link Review of Consumer Credit Law

The government department responsible for conducting the review is The Ministry of Business, Innovation & Employment (MBIE)

MBIE recently asked for feedback about problems people are facing when borrowing and lending, and potential ways to address these.

Some of the issues MBIE has observed include

• Some credit is very expensive. Some lenders are charging high interest rates (up to 800% per annum) Repeat borrowers pay a lot in interest and debt can quickly become unmanageable.

• Lenders are providing too many loans to people who can't afford to pay them back

• Some creditors are charging fees that don't seem reasonable

• There have been complaints about bad behavior during debt collection


Once all the submissions have been received, MBIE will use these and other input to formulate recommendations and make policy decisions which will be announced later in 2018.


In the end, MBIE hopes to enable better informed decision making to consumers, reduced predatory and irresponsible lending, and increased lender compliance with legal requirements.

The current regulations are principles-based and at the same time the Responsible Lending Code was published. However, it is believed by those in the current government that these laws do not go far enough and that more prescriptive and definitive laws are needed. For example, interest rates are likely to be capped by regulation, rather than the current unregulated practice.


Overall, the changes are likely to be good for consumers but some people may struggle to find a lender willing to provide a credit service for them, especially if they are in financial hardship. We are likely to see the credit industry changing to comply with new laws and a much lower prevalence of high cost lending currently marketed by advertising payday loans, fast cash loans, bad credit loans and similar terms.

Once in place these changes will probably impact people with poor credit history seeking a short-term loan. If they search online for payday loans bad credit nz they may not find any lenders providing this type of loan because loans like this will no longer be profitable.

Got any questions about how you may be impacted by the new laws? Commonly Asked Questions Cash Relief team members are available to help. They are part of a New Zealand owned and operated company and have up to date information about the potential law changes. They've been lending to Kiwis since 2011 and strive to give the right loan to all inquirers who meet the lending criteria. Contact Cash Relief today if you need financial assistance.


Review by Government of NZ Credit Laws