Credit providers
This page was updated3 weeks ago
If you provide credit to consumers you must follow New Zealand consumer credit laws.
What is a consumer credit contract
A consumer credit contract is a contract between a consumer and a lender. If you provide a mortgage, credit card, arranged overdraft or personal or cash loan – you have probably entered a consumer credit contract.
When consumer credit law applies to your business
If you provide credit, consumer leases, or operate buy-back schemes, consumer credit law applies to your business.
Changes to credit laws
There have been a number of changes to credit laws since 2019 which are set out in the timeline below.
Fit and Proper Person certification
If you or your company is a provider of consumer credit (lender) or a mobile trader, and you are not already licenced or authorised by the Financial Market Authority or Reserve Bank of New Zealand, you must be certified under Part 5A of the Credit Contracts and Consumer Finance Act 2003 by the Commerce Commission.
Due diligence duties for directors and senior managers
From 1 December 2021, directors or senior managers of a consumer credit provider and/or mobile trader selling goods on credit need to comply with the due diligence duty.
Advertising
If you are a lender, this page will help you understand your obligations in relation to your advertising.
Publication of contract and cost of borrowing
If you lend to consumers or take security over consumer goods you must make your standard form contract terms and costs of borrowing for certain loans available publicly.
Disclosure obligations
You must provide key information to borrowers before a loan is entered into, and at certain times during its life.
Charging interest
There are rules about how you can calculate and charge a borrower interest or default interest.
Consumer credit fees
When you lend money, the Credit Contracts and Consumer Finance Act has rules you must follow when setting your fees.
Assessing for suitability and affordability
From 1 December 2021, lenders providing consumer credit and mobile traders selling on credit need to comply with new regulations.
Lender responsibility principles
When providing credit, you must ensure you comply with the lender responsibility principles. The lender responsibility principles impose obligations on lenders when advertising, before entering into a loan, and during all subsequent dealings with borrowers and guarantors.
Variations to consumer credit contracts
When you make changes to a consumer credit contract, there are rules around what information you must give to the borrower, and when and how you must provide it.
Hardship applications
If a borrower makes a hardship application, you are required to consider it and follow a specific process.
Repossession rules
There are rules lenders or repossession agents must follow when repossessing goods.
Buy-back transactions
A buy-back transaction is where a homeowner transfers their home (or an interest in their home) to a transferee, who typically pays their debts or gives them money. The former homeowner has the right to continue living in the home and to buy it back at some time in the future.
Consumer leases
If you are in the business of leasing goods to consumers for their personal or household use, you may have to comply with credit laws.
High cost loans
If you provide high-loans, there are specific rules that you will need to comply with from 1 June 2020.
Lending online
It does not matter how a loan is made – whether it is online, in person, on the phone or by text or email, the lender responsibility principles apply.
Supporting customers in financial difficulty
The Commerce Commission and the Financial Markets Authority (FMA) have collaborated on messaging around supporting customers.
Annual Return
Lenders must provide an annual return to the Commission containing information about loans entered during the year.
Credit Pānui for Lenders
This quarterly pānui updates lenders on all the latest news from the Credit branch.
Buy Now Pay Later
From 2 September 2024, Buy Now Pay Later lenders will need to comply with all the obligations of a lender under the Credit Contracts and Consumer Finance Act 2003 (the Act) and the Credit Contracts and Consumer Finance Regulations 2004 (the Regulations), unless an exemption applies.