“Commerce and Consumer Affairs Minister David Clark has shown how out of his depth he is once again – this time on the Credit Contract and Consumer Finance Act,” 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.
“When asked what he’d say to the man who applied to have his credit limit increased by $500 and was confronted with fifteen pages of forms, despite never having missed a payment in the seven years he’d had the card, the Minister flippantly replied that he should change banks, rather than taking responsibility for it.
“ASB Chief Executive Vittoria Shortt has said “we are seeing an impact of around 7 per cent of customers that we would have liked to lend to, but have not been able to, given these changes.” CoreLogic says the law is locking out first home buyers.
“For many people this has meant huge amounts of stress and anxiety as they worry whether their Netflix subscription will ruin their dream of homeownership.
“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.
“ACT asked the Finance and Expenditure Select Committee for an independent inquiry but this was rejected.
“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 and David Clark needs to show some maturity and start taking this issue seriously.”