“An inquiry proposed by ACT into the effects of recent changes to the Credit Contracts and Consumer Finance Act has been rejected,” says ACT’s Associate Finance spokesperson Damien Smith.
“Since the law came into effect, we have heard from people in banking, mortgage broking, and people trying to get credit. They’ve been frustrated with needless red tape since it came into effect on December 1.
“In one reported case, a man who applied to have his credit limit increased by $500 was confronted with fifteen pages of forms, despite never having missed a payment in the seven years he’d had the card. It’s also reported that there may be an artificial credit crunch as the law slows down lending across the board.
“People shouldn’t have to choose between Netflix or a mortgage.
“The Finance and Expenditure Committee examined the Credit Contracts Legislation Amendment Bill in 2019. Now that law is creating widespread headaches for people trying to get credit form their banks, and the Committee should be asking why.
“ACT Leader David Seymour wrote to the Committee, and its chair Dr Duncan Webb, asking that the Committee use its powers to initiate a review or at very least seek a briefing into the havoc this law is causing. What is the point of the Committee having such power if it won’t use its powers to hear the public’s concerns about the laws it’s been involved in making?
“Nobody believed that the law would affect every single person seeking credit, whether they were vulnerable or not, but that’s exactly what’s happened.
“The Minister has handed it over to the Council of Financial Regulators, which includes the Ministry of Business, Innovation and Employment (MBIE). MBIE were the officials that advised the Committee passing this law change in 2019. It should be Parliament seeking testimony from industry practitioners, rather than the officials from MBIE behind closed doors. This inquiry needs to be independent.
“It’s time for our politicians to step up, take responsibility and fix the problem. The occasional flat white shouldn’t exclude you from the Kiwi dream of homeownership.”