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New Zealand

Small CCCFA Relief To Relief To Storm Victims

The government has moved to ease the impact of the Credit Contracts and Consumer Finance Act (CCCFA) on storm-damaged properties.

Tuesday, February 14, 2023 at 1:22 PM

Eric Frikberg

Decided to waive certain requirements of the CCCFA if the lender’s existing customers were affected by the storm this month or the last.

The waiver applies to a limit of up to $10,000 and a temporary period of up to 12 months on credits provided to pay for repairs.

This change will remove the need for lenders to partially comply with Article 9 of the Act on Overdrafts and Mortgages.

They are based on the lender’s reasonable judgment as to whether the borrower is likely to make payments under the contract without suffering material difficulty and whether the guarantor will be able to comply with the guarantee without suffering material difficulty. related to conducting relevant research.

The waiver is subject to several conditions, including the lender’s willingness to provide hardship assistance to the borrower after credit has been provided if the borrower requests assistance.

This includes lenders refinancing credit agreements on affordable terms, reducing interest rates and reducing debt.

This decision by the government has not received universal approval. The Financial Services Federation (FSF) is pleased the government acted quickly to save the victims, but says the plan is flawed.

“During our consultations, it became clear that mortgages and overdrafts were not the best products for the financing people needed to recover from a disaster,” said Lynn McMorran, executive director of the FSF. rice field.

“For many people, their cars and household goods are their greatest assets. It is not surprising that products offered by non-bank lenders that specialize in financing household goods and cars are more useful for people in this situation. It’s simply logical.”

McMorran said only those in the fortunate position of owning a home will be helped by mortgage relief.

Additionally, overdrafts are likely to be unsecured loans, so the cost of credit is higher than the cost of a personal loan secured by the product you purchase.

“The FSF continues to express its concerns to the authorities and hopes that more sensible outcomes can be achieved to ensure that those in need get help,” McMorran said.

The government made the change without fanfare at 5 p.m. Monday.

tag: CCCFA

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