The CCCFA amendment bill has passed its third reading, transferring oversight of consumer credit laws to the Financial Markets Authority. The government says the changes make rules simpler and more workable; Labour says they weaken consumer protections.
A bill that rewrites key parts of New Zealand's consumer credit law has passed its third reading in Parliament, shifting regulatory oversight of the sector to the Financial Markets Authority.
The Credit Contracts and Consumer Finance Amendment (CCCFA) Bill passed last week, completing a legislative journey that began after changes under the previous government — intended to crack down on predatory lending — produced unintended consequences including overly restrictive checks on ordinary borrowers, according to interest.co.nz's coverage of the bill's passage.
Commerce Minister Cameron Brewer said the previous rules had made lending harder, slower, and more frustrating than necessary. "Borrowers were put through intrusive and unnecessary checks, lenders became overly cautious, and good Kiwis were left jumping through hoops just to get a loan," he said. "These rules were meant to protect consumers. Instead, they created complexity, confusion, and cost."
What changes
The FMA will take over oversight from the Commerce Commission from next month, bringing consumer credit under the same regulatory framework that governs other financial services. Lenders will enter the FMA's licensing regime, giving the regulator more tools to monitor and supervise lending activity.
The bill also removes a due diligence duty and personal liability for directors and senior managers that the government said had been discouraging qualified people from serving in those roles. It addresses how liability for borrowing costs is assigned when lenders breach certain disclosure requirements — though the government has explicitly noted this does not affect the class action litigation against ANZ and ASB.
FMA executive director Clare Bolingford said the change creates a more connected and coordinated approach to regulating financial market conduct. "Introducing a licensing regime for lenders will give the FMA more ways to monitor and supervise lending activity, and will provide a wider set of regulatory tools to support effective oversight."
Commerce Commission chief executive Sarah Bartlett said the transition would be "smooth and well-governed" with strong protections for data integrity and privacy.
Political pushback
Labour's commerce spokesperson Arena Williams said the changes do not improve things for consumers. "It sends all the wrong signals, and this government should hang its head in shame," she said during the second reading. She pointed to the need for consumers to have confidence that when they are owed money by banks or insurers, the law will be enforced in their favour.
The legislation is part of the National-ACT coalition agreement to rewrite the CCCFA to protect vulnerable consumers without unnecessarily limiting access to credit. The changes follow years of reform to the law, including ANZ's appeal of a High Court decision related to its responsible lending obligations, which exposed the sector to significant remediation costs and influenced how banks approach lending compliance.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.