14 Comments

Great summary of the CCCFA. The tweaks seem to be largely sensible, and they have kept the overall consumer protections in place.

The attacks on the CCCFA was an organised PR disinformation campaign from vested interests. The stories attempted to frame the issue that banks were declining mortgages due to how people spent their money (which was false. Banks just wouldn’t lend the requested amount if your total regular spending was too high to service the mortgage you requested).

The real irony is that with the rise in interest rates many people that may have been approved without a CCCFA in place in late 2021 are probably better off that they weren’t lent more than they could afford to repay

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How to shut the banks and others up.

Announce legislation is to be introduced that when real property (houses, cars, washing machines) is bought on credit then the only security allowed is the real property itself. No personal guarantees by the buyer, parents, etc.

Well it may not shut the lenders up. It may send them into paroxysms at seeing their loss of entitlement to print money.

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I'm flummoxed (big word of the day).

Putin likes to recognise breakaway provinces as independent states.

So how come he hasn't done it for Taiwan?

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Aug 2, 2022·edited Aug 3, 2022

The tweak which acknowledged after pay is interesting, as after pay (and similar services) currently do not fall under the CCCFA, and IMO is the only real failing of the legislation. Because these services don’t charge interest, they charge fees for missed repayments, they fall outside what CCCFA considers lending. Those susceptible to being taking advantage of by loan sharks are the same people now being hit hard by after pay products. They need to be brought in. This is a result of the time legislation takes to be created and put into law vs fintechs who created a product and disrupted the credit card industry while CCCFA was being written.

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I'm for opening this one up, please Bernard. Your analysis on this needs to be read by more. Thank you. C/f Ryan's comment.

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Hi Bernard , who are these anonymous “officials” mentioned in your CCCFA article? Treasury? MBIE?

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I am currently going through the process of borrowing additional funds in order to do some renovations (reasonably significant ones) on our family home. In total, after what we want to borrow plus what our current mortgage is we would have approx 75% equity in our property. In the past I think the banks would have just ticked this off, after all the risk is very low to them. Now they seem almost hyper-sensitive.

As well as declaring all our spending (which we've all heard the stories about, i.e. you spend HOW much on insurance, can't you buy a cheaper car, or, you'll probably have to stop a small savings account for your kids) They now want to reduce the term of the loans so that they are repaid before you reach retirement age. In theory that sounds very prudent and sensible but what I don't understand is they aren't factoring in any increase in your income over a twenty year period.

Result is that they want much bigger repayments from the start and still won't lend us as much as we need.

I respect the regulations and agree in principle with them but I feel like, to an extent they have hamstrung lending on low risk borrowing, after all, probably about 20-25% of what we spend will go to the government coffers in taxes. Less we can spend, less they get back.

Maybe more nuanced rules need to be considered?

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It seems to me child poverty is policy in NZ then all the broken youth get assistance from extra bureaucracy which justifies their existence. Which is really all Government does expand to justify itself and cause more trouble to people. Rather than just fulfilling legal obligations to have support. So once again people are controlled and “farmed” badly to justify big Government rather than enforce legal and human rights. WINZ and Oranga Tamariki could be binned tomorrow if adequate resource and respect was being given to women and children as per law. Instead they cause chaos and mayhem and interfere in this natural process and natural needs. The example of introducing and unleashing terrible drugs sold in dairies springs to mind. There are no consequences and families have to try to pick up the pieces if they can and are not so poor and overburdened and time poor or ill themselves. Much like Government could be directly holding a “book” of mortgages with flexible and decent T&Cs but prefer to hand taxpayer cash to private middlemen (its nearly always men) banks adding another layer of invasion into privacy and lives and who feel they can be as rude as they like to people, rather than the taxpayers and clients they are supposed to serve. In the end it is this that causes risk to the economy not Government debt which is secured by property, taxes and resources of the country and there is no need to continually punch down on the people (usually the most vulnerable) by ignoring laws. Making more rules is all these people can do rather than enforce the appropriate ones to ensure everyone gets their fair share of resources when they need them. It’s an ugly MO. We have to teach our children not to trust them or their words sadly. A farce. There is not that much they have to do but making it up as they go along isn’t helpful. Neither major party appear to have a coherent plan going forward and won’t acknowledge they’re making the country inhabitable and inhospitable and people very unhappy and stressed once again failed ng in their obligations and duties of care for the population. Particularly women and children simply by failing to enforce simple laws and taking simple steps at the very top and instead handing out largesse where it’s not needed.

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