11. CAROL BEAUMONT (Labour) Link to this
to the Minister of Consumer Affairs
What actions has the Government taken to date to control excessive interest rates or irresponsible lending?
Hon SIMON POWER (Minister of Consumer Affairs) Link to this
The Ministry of Consumer Affairs has been working on a review of the Credit Contracts and Consumer Finance Act since 2008. The ministry has also assisted individuals to take cases to the disputes tribunal concerning irresponsible lending practices. I am advised that the Commerce Commission has taken action against a number of parties over unreasonable fees and misrepresentations about terms and conditions of loans. In August I will be hosting a financial summit in South Auckland. This summit will have a particular focus on irresponsible lending and, no doubt, excessive interest rates.
Why did the Government deprioritise the review of the Credit Contracts and Consumer Finance Act, which included improving security and disclosure provisions, and delay it by over 12 months when financial pressures on low-income families have been increasing?
It was not deprioritised; priority was given to consumer law reform work. That work has now been completed and priority is now being given to credit reform.
How will another summit in August on targeting loan sharks create enforceable changes in this parliamentary term?
It will give communities who are affected by this issue the opportunity to have input into policy before I form a final view on this matter. Given that I have been in the role for 6 weeks, as opposed to 9 years when nothing happened, I think it is a considerable degree of action.
I raise a point of order, Mr Speaker. I think my question was quite specific. It sought to know how this summit will create enforceable changes in this parliamentary term. I do not believe that the Minister addressed that at all.
Mr SPEAKERI think it would be pretty rough for me to claim that the Minister did not answer the question. It may not have been quite the quality of answer that the member wanted, but she should be aware that she has two more supplementary questions should she wish to pursue the matter further.
Why is the Minister now saying that he will consider interest rate caps; and what has changed since the Government ruled out supporting interest rate caps?
In respect of the first part of the question, I say that my colleagues will no doubt be able to reinforce the view that I am regarded as very open-minded.
I seek leave for the Credit Contracts (Oppressive Lending Provisions) Amendment Bill to be set down as a members’ order of the day.