The latest review of the changes made to the Credit Contracts and Consumer Finance Act (CCCFA) last year has now been announced by Commerce Minister David Clark. The Minister who had the report from the Council of Financial Regulators sitting on his desk for over 90 days has ignored their advice to target affordability regulations to riskier lending and lenders only as well as make changes to the penalties regime. Targeting affordability requirements to support those most at risk would have provided appropriate protections as well as freeing up lending for those who can afford it.
Based on the conversations that I have had with the banks the changes that Minister Clark has agreed to make to the Act will only see small differences to overall lending and lending processes that banks are now required to use. Perhaps more concerning is that these small changes won’t be implemented now until March next year.
There continues to be no sense of urgency from the Government to address what many see as been a contributing factor to the current economic slowdown and the increasing likelihood that we are heading into a recession. Things appear to be particularly gloomy now for the construction industry.
I will continue to update you about any additional loosening of the CCCFA lending rules.
If you are currently unsure if you are eligible for a new home loan, please contact me.