The Credit Contracts Legislation Amendment Act 2019
(Act) became law on 19 December 2019. The Act
amends the Credit Contracts and Consumer Finance Act 2003
(CCCFA) and introduces some significant changes
which will affect all lenders providing consumer credit in New
Zealand.
In addition providers of "high-cost" consumer credit
contracts will be subject to new rules and "mobile
traders" will be brought within the scope of the CCCFA.
Responsible lending
The Act extends and strengthens the existing lender
responsibility provisions in the CCCFA.
Affordability and suitability
tests
Lenders are already obligated under the CCCFA to make
"reasonable inquiries" as to a borrower's or
guarantor's requirements and objectives and whether the
borrower or guarantor will be able to make payments under the
agreement without suffering "substantial hardship". From
1 April 2021, these inquiries must be carried-out in accordance
with requirements set by regulation.
