www.autofile.co.nz
APRIL 2022
THE TRUSTED VOICE OF THE AUTO INDUSTRY FOR MORE THAN 30 YEARS
Fixing car loan woes remains months away Lenders fume at minister’s handling of changes to legislation as industry grapples with credit crunch
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inance providers and car dealers will have to wait until at least June for the government to tackle the “unintended consequences” caused by its amendments to legislation. Measures unveiled by David Clark, the Minister of Commerce and Consumer Affairs, last month and any further changes identified by the Council of Financial Regulators (CFR) will be rolled out at the same time. The CFR’s review into the Credit Contracts and Consumer Finance Act (CCCFA), which is due to be published this month, will focus on regulations that enforce the legislation and the responsible lending code. It means lenders and their agents, such as car dealers, will have to continue navigating the credit crunch created by the new laws for the next few months. Clark concedes in cabinet papers dated March 11, which have been accessed by Autofile, that the
Issues with finance laws are unlikely to be fixed before June
initial findings of his investigation suggest some of the changes that came into effect on December 1 “appear to be contributing to a drop in lending”. He says impacts have been felt in home lending “and more significantly other personal lending”, such as car loans and credit cards. “While some impacts appear to be consistent with outcomes sought by affordability and
sustainability changes, there appear to be unintended consequences,” adds the minister. “There are continued concerns the new prescriptive assessments apply to all lending types and consumers, with limited discretion and narrow exceptions.” Clark believes his so-called “immediate changes” will make practical updates to the responsible lending rules and tackle some problems with the CCCFA. These include removing regular “savings” and “investments” as examples of outgoings lenders must inquire into when assessing borrowers’ likely expenses. The government will also clarify that when consumers provide detailed breakdowns of future living expenses, there’s no need to also inquire into current living expenses from recent bank transactions if they are benchmarked against “robust statistical data”. The Financial Services Federation (FSF) represents non-banking lenders, many of which operate in
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Marques adapt to ‘new tax’ Traders seek feebate advice p10
EVs still being shipped to NZ p13
Association chief set to retire p15
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