In addition to new responsible lending rules, other changes to the Credit Contracts and Consumer Finance Act took effect on 6th of June 2015. The most important are:
- Borrowers now have five, instead of three, working days to change their minds about taking loans.
- Standard form credit agreements, interest rates and fees must be publicly available free.
- Repossession rules have been brought into the Act and “essential” consumer goods such as beds, stoves and washing machines can no longer be repossessed. Only items specifically identified in the credit contract can be taken and repossession agents must be licensed.
- Hardship applications, made when borrowers have trouble repaying loans, can now be made up to two months after default. Previously, these applications could only be made if the consumer was not in default.
- Maximum penalties have been aligned with the Fair Trading Act and the Commerce Commission has been given powers to issue infringement notices for minor breaches of credit law.
Taken from Consumer Magazine’s “Responsible Lending”Article in Issue 558. Read the whole article here.