13413 (2024). Scott Willis to the Minister of Commerce and Consumer Affairs

13413 (2024). Scott Willis to the Minister of Commerce and Consumer Affairs: What specific examples can the Minister provide, when he refers to “overly prescriptive affordability regulations”, in regards to the proposed reform of the Credit Contracts and Consumer Finance Act 2003?

Hon Andrew Bayly: The nature of the affordability regulations is prescriptive, in that they prescribe both the types of information lenders must obtain from their inquiries and how lenders must apply that information to their assessment of affordability. An example would be the two-stage process for estimating expenses prescribed in detail by regulations 4AK and 4AM. The regulations generally leave relatively little room for lenders to use good judgement and to innovate where other methods of assessing affordability may prove more reliable. As such, I intend to revoke the substance of the affordability requirements to enable Kiwis to access affordable finance and allow lenders to assess affordability specific to the circumstance.