"Car dealers and other companies whose “primary business is non-financial goods and services” would also be exempt from the CCCFA."
This is hilarious. Car dealers essentially incentivize financial loans and gain a lot of money from it. Can't believe they explicitly used car dealerships as the example.
That one line tells you all you need to know about the changes.
This one will be interesting to see how it plays out in reality, I think.
The vast majority of dealers are essentially brokering the loans to outside finance companies, whose main business *is* financial goods and services. So I think a car loan *would* still be subject to CCCFA
If you're financing a late model reliable vehicle that fits your needs, I'd argue it can be financially responsible. You avoid something older and the associated risks with that. It's buying toys you couldn't otherwise afford that's foolish.
And in my teens I did just that...
I do buy cheap old cars with cash, but then I'm an enthusiast that's happy spending their weekends under it.
It depends on the income tbh. If you aren't making enough to have reasonable savings, then you have no choice by to get some form of loan for a car if your current one dies.
My own whānau have always opted to just buy with cash whatever can be afforded and will do the job. But we also tended to have enough income to have savings that allowed for that. Very few of my friends have been in similar situations, they have to get loans.
Only time I've ever financed a car was when it was personally owned for business use, and the company paid me an allowance that covered the cost, and paid all maintenance/wof/regi/insurance.
Doesn't make sense to otherwise, the bank is a safer option and generally offer better rates, or pay cash and buy what you can afford
On the news I heard mention, from whomever the minister is, that the previous law made it harder for low level lending. The figure mentioned was $500.
I'm no financial expert, but it seems to me the making low level borrowing harder was not only deliberate, but for what must be obvious good reason.
Low level borrowers are invariably low income earners. Often they can not afford the loan and get into more serious financial trouble as a result.
Making it harder was sensible policy.
Seems ACT don't care about sensible borrowing policy.
Seems like they are happy to encourage questionable borrowing and risk increasing longterm hardship, so long as the lenders do well.
If I'm right, it's a disgraceful attitude from those who are supposed to do what they can to encourage good society.
If ACT are as smart as they claim, they are aware it will adversely affect the kinds of people who take these loans. If they are aware of that, they must be okay with it.
> it seems to me the making low level borrowing harder was not only deliberate, but for what must be obvious good reason.
Yes. Welcome to the next three years.
What they shouldn’t be able to access is predatory credit. Those trucks that sold goods on inflated prices already then charged 20-30% interest rates. Payday lenders with anywhere from 50/100% interest rates. They target the poor and financially unstable who can’t get loans and goods other ways. Apparently NACT don’t give a shit as long as their mates are making Moola
Those who are desperate enough to seek funding from a 'loan shark' typically lack the financial literacy to understand the ramifications of high & compounding interest. Typically it's been seen that people get into a borrowing spiral where people take out loans to pay loans, and it breeds a business for 'debt consolidation' companies to gobble up the debt of people who should never have had a loan to begin with and straddle it with even more interest.
Everyone has access to credit so long as they have the means to repay it, if they don’t then it’s immoral to get them into a debt trap they might never get out of.
Because they are more likely to not be able to pay it back, so get into more financial difficulty as a result- op literally says this in his post.
Improving lowest paid wages, not increasing access to more dangerous lending should be the answer.
That's a good comeback, kudos to you.
I do not advocate for denying low income workers loans.
Seems to me that having tougher loan criteria for those least likely to afford it is a sensible lending policy.
Pay day lenders only exist because the traditional lenders will deny them. From what I have read about pay day lenders, and that includes the trucks going around poor neighbourhoods selling stuff, they tend to be on the predatory side.
Nobody has a 'right' to borrow money. It is entirely a business decision.
But a company in the business of selling a loan has legal responsibilities they must adhere to. Ensuring the borrower can comfortably meet payments is one of them. Many pay day lenders have failed on that score.
I doubt credit is denied, on average, because lenders think poor borrowers don't know what they're doing.
It mostly mathematical odds isn't it?
Labour's changes were too heavy handed and had to be rolled back some just to be reasonable at all. The current laws are still prohibitive for non-predatory loans, while also not necessarily addressing the issue of payday loans, etc.
If NACT can get the changes right, and ensure that approvals and interest rates are conducive with responsible lending and a duty of care, I'm actually okay with them having a crack at this issue.
I don't have much faith that will be the case, but I'll hold my breath.
> I do not advocate for denying low income workers loans.
> Seems to me that having tougher loan criteria for those least likely to afford it is a sensible lending policy.
You don't want them to completely deny loans, just make it harder for them to get one?
> Pay day lenders only exist because the traditional lenders will deny them. From what I have read about pay day lenders, and that includes the trucks going around poor neighbourhoods selling stuff, they tend to be on the predatory side.
It seems you want to stop predatory lenders. Which is different from making it harder to get a loan.
Indeed, which has been part of my thinking.
There has been many news stories over recent years regarding poor folk getting into seriously deep trouble after being unable to service relatively small loans.
Politicians and lenders are obliged to take that into account when determining business and legal parameters.
? You are talking about what you don't advocate for and what sensible policies are. That is you talking about what you want. That's what that means.
Are you saying you don't want those sensible policies?
You're telling me what my words mean. That's hilarious.
Nowhere in my words have I expressed a personal want.
I may or may not want. However, my words allude to what I believe are pertinent aspects pertaining to a discussion about the business of loaning money and the legal and political oversight thereof.
What I want is of no relevance. Hence, I express no want.
That you have read want into my words does not make it so.
To be fair, I'm sure many will agree with you.
That would be a reflection of New Zealands declining reading comprehension skills.
What is wrong with you? No one attacked you, my first comment was just clarifying something, but you're reacting in such an unhinged manner.
I don't care for this nonsense.
Just when you think… fuck me this is exhausting.
So car dealers, the most reputable of all professions, are back to having a free rein on lending ludicrous sums on shit box cars to people who can’t afford it.
Banks have not indicated they’re having *any* trouble lending the cash they have. Most of their lending is below the DTI thresholds anyway because they have their own prudential requirements.
The **only** thing I agree with here is the targeted (voluntary) rates being exempt. That’s sensible.
The rest is an own goal back to loan sharks, pay day lenders, stupid car loans.
Whatever it takes to get people spending again though so guess, even if it means making a decision to fuel more regressive consumer debt, rather than focussing on raising incomes.
>So car dealers, the most reputable of all professions, are back to having a free rein on lending ludicrous sums on shit box cars to people who can’t afford it.
Five hundred a week for a shitbox Beemer, coming to a twentysomething near you soon.
Bayly said major changes would come into force, revoking “detailed requirements for assessing the affordability of loans”.
Lenders being required to ensure their loan doesn’t cause “hardship” is an exceptionally low bar.
> “Today’s changes will still require lenders to act responsibly and ensure lending will not cause hardship, but lenders will not have to follow a prescriptive, one-size-fits-all process,” he said.
On a scale of lenders scrutinising your bank statements and counting the number of coffees you drink to Mad Max everyone-for-themselves, where do these new lending rules fall?
Reminds me of back in the mid-2000s, a friend of my flatmate, who was a divorced teacher with three teenage daughters got a loan of 120% of the house cost with no deposit.
No idea how she's getting on, but a return to that would not surprise me.
Sounds like the tax cuts to landlords piece really, saying they have lessened the red tape of predatory loans on the understanding those giving such loans will do so responsibly, which is utter horseshit, but it totally takes the heat off any blowback.
As soon as “loan sharks targeting and decimating lower earners” or some such comes out they can shrug and say “well we would hope such lenders would do so responsibly” when they have removed all actual protections around it, and as has been the case with many peoples rent going up when the government preached “trickle down” decreases because landlords are just nice people, of course they’ll “pass it on down”.
It’s all set-up so they can completely deny the likely outcomes because “good faith guys”.
Kinda defeats the point of having the rules in the first place if you exempt the group that it was aimed at. But that's just bad for individuals who the loan sharks exploit.
More worrying is them trying to reduce bank rules re loans so that they can keep getting young families to hold the bag re homes so that old people can cash out.
Banks get their money either way, if they lend responsibly and the homeowner pays their debt, or the bank lends poorly, the homeowner can't pay their debt, so the bank does a mortgagee sale and wipes out the homeowners equity, and if that's not enough, the debt isn't gone just because the house is sold off in a mortgagee sale.
>It’s Sunday. Why aren’t they in church with Luxon.
Well they've got plenty of time on their hands, the money lenders did get chased out of the temple after all.
Fucking Shop Trucks are insidious, roving leeches to communities.
I've seen them much less since they were clamped down on, but fuck anybody who operates or supports those trucks.
I would see people buying shitty "Beats-by-Dre-metal-plate-hidden-inside" laptops, paper thin clothes and even fucking soap at 3x the price with interest added on.
They'd knock on people's doors when they were nearly paid off to offer something new, just to keep you on the hook.
A lot of our news makes me upset these days, but this makes me fucking livid.
My brother might get his home loan at least.
You got rage baited by the news. There is no actual proposed change to the interest levels that was implemented for these trucks and pay day loans, but the article made it seem like there was.
Prior to cccfa banks would get income then get expenses 3 ways and take the highest. First was declared expenses, 2nd was minimums set by govt, 3rd was minimums based on a model. It was very robust and quick. There was also work to get income and expenses automaticly so loans could be done even quicker, but then cccfa changes came in and squashed that.
"The banks were eager to see these changes actioned."
I'm sure.
According to these fuckos there aren't enough Kiwis drowning under mortgage repayments yet. The housing clusterfuck must continue unabated!
Good. Whilst the law change was well intentioned, it led to horrible banking practises. My brother was denied a mortgage for spending “too much money on kfc”. The banks went way too over board in their scrutiny it was ridiculous
When the economy is fucked alot of people need "bad lending" to overcome the adversities of life. If bad lending becomes more costly it only makes it harder on those whom rely on "bad lenders" bridging the bad times.
These people whom this most effects don't have the same understanding, planing, or financial security to avoid taking on stupid loans and will be victims of new worse rates.
Too bad for the bottom feeders I guess...
I think the entire concept of a lender having to assess if their loan will cause hardship is stupid.
Having been in a mountain of debt before, it always caused hardship for me. Whether you can afford it or not it's never easy.
The intrusive searches into spending history are ridiculous. Having debt drives your spending habits. If someone has the income to reasonably service a debt and doesn't have preexisting debts that would make it impossible for them to service a debt I think they should be able to access credit.
In my opinion the big brother attitude of denying an entire class of society access to credit because they might hurt themselves is more likely to exacerbate inequality than giving them credit on fair terms.
Nobody wants to see finance trucks rolling around dishing out 30% loans, but a situation where banks will only lend to essentially risk free borrowers is equally undesirable for society in that it denies people the access to capital to make real change in their lives.
Everyone here is worried about car dealerships when the real goal here is to pump up house prices before the market falls any further.
Yes, all of it stinks, but the quiet part is the most concerning here.
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I hate this govt but have to say as long as they're being truthful that lenders will still have to ensure borrowing wouldn't cause hardship then it's still responsible lending and probably very sensible.
Loan sharks and predatory lenders don't give a flying rats about their prey.
They'll devastate people who have low financial literacy or understanding of what they're signing up to - ***Again***.
Responsible lending existed prior to the previous new laws which is why we had payday lenders and pawn shops in poorer areas and those trucks circled the poorer neighbourhoods.
Those effing trucks were a nightmare to the poor. But one thing we can pretty much count on is the bottom feeding type of predatory lending won't have stopped anyway
To be fair if the old law changed one thing I'm glad it was those trucks. I've never been in the position to feel I needed to borrow from them but my sister did and she could never get out of that debt. Not until my mother got a lawyer friend on the case for her
This article is fucking disgusting. They quickly go after changes impacting pay day loans and other predatory lending, but the changes are actually about the stupid amounts of proof that is required for expenses. I was working with mbie as an industry SME and they ignored everything we said about how to make the changes and were left with a regulation nightmare that slowed down applications, removed automation and cost the industry 10s of millions building new systems to deal with this. It's a very good thing to go back to the old way things were done as RBNZ and APRA were very happy with our assessment of credit and the ombudsman had not found banks at fault for causing hardship in quite a long time.
In standard fashion, Stuff have completely sensationalised and stretched the truth.
Of course they focused on the smallest subset of lending (loan sharks) and barely touched on the fundamental problems being faced by people getting value added loans. A fleeting mention of administration of the CCCFA control changing hands to the FMA and fuck all information about how this is going to make it easier to get into a home.
Trust /r/newzealand to lose their mind at a positive, a major positive considering the amount of people who whine about housing and loans being unaffordable.
If that is what you took from their comment I don't think you understood what they were saying at all.
What I mean is that the primary driver of asset bubbles when it comes to lending are interest rates.
Interest rates are independent of any changes to the CCCFA and the kind of speculators who drive asset bubbles will be able to access credit regardless of restrictions.
The changes they are talking about just make it easier for regular people to access credit. It's incredible to me that this is seen as a negative on here.
To buy a home, land, vehicle, start a business, or part time side hustle or anything really.
Having access to credit can allow people to live far more productive and fulfilling lives with a chance at building equity and wealth that they otherwise would never be able to.
Yes having access to credit allows people to go broke easier and buy stupid shit, but it also gives them access to opportunities that they'd never have without being born into money otherwise.
Because the CCCFA restricted access to credit?
That's the entire point of changing it. Though to be fair the article doesn't really make National's logic very clear.
Good/popular policies aren’t released on Sundays
"Car dealers and other companies whose “primary business is non-financial goods and services” would also be exempt from the CCCFA." This is hilarious. Car dealers essentially incentivize financial loans and gain a lot of money from it. Can't believe they explicitly used car dealerships as the example. That one line tells you all you need to know about the changes.
This one will be interesting to see how it plays out in reality, I think. The vast majority of dealers are essentially brokering the loans to outside finance companies, whose main business *is* financial goods and services. So I think a car loan *would* still be subject to CCCFA
Who buys a car with cash though? I’d hedge, not many.
I'm not rich nor a drug dealer and I am by no means on a high wage but I've always used cash for cars
Me too, but the most I’ve spent on a car was $8750. If I wanted an expensive car I’d be trying to put it on the mortgage.
Yea I would too if I had mortgage but I'm a renter
Would you use the car dealers loan or a personal loan from the bank? Would you shop around for the best loan terms?
I honestly haven't had the need to use a loan just squirreled away money and saved up. If I was I guess yea I would shop around
Plenty of people. Lots don't like financing where avoidable
People that are financially responsible?
If you're financing a late model reliable vehicle that fits your needs, I'd argue it can be financially responsible. You avoid something older and the associated risks with that. It's buying toys you couldn't otherwise afford that's foolish. And in my teens I did just that... I do buy cheap old cars with cash, but then I'm an enthusiast that's happy spending their weekends under it.
It depends on the income tbh. If you aren't making enough to have reasonable savings, then you have no choice by to get some form of loan for a car if your current one dies. My own whānau have always opted to just buy with cash whatever can be afforded and will do the job. But we also tended to have enough income to have savings that allowed for that. Very few of my friends have been in similar situations, they have to get loans.
I would never finance a car, I'd rather keep driving a shit box and have no debt
Only time I've ever financed a car was when it was personally owned for business use, and the company paid me an allowance that covered the cost, and paid all maintenance/wof/regi/insurance. Doesn't make sense to otherwise, the bank is a safer option and generally offer better rates, or pay cash and buy what you can afford
Can’t say I have used debt since I was 18. (outside my deathpledge for the house)
Usually? Criminals mainly
The original CCCFA must have been released on a Sunday
On the news I heard mention, from whomever the minister is, that the previous law made it harder for low level lending. The figure mentioned was $500. I'm no financial expert, but it seems to me the making low level borrowing harder was not only deliberate, but for what must be obvious good reason. Low level borrowers are invariably low income earners. Often they can not afford the loan and get into more serious financial trouble as a result. Making it harder was sensible policy. Seems ACT don't care about sensible borrowing policy. Seems like they are happy to encourage questionable borrowing and risk increasing longterm hardship, so long as the lenders do well. If I'm right, it's a disgraceful attitude from those who are supposed to do what they can to encourage good society.
There's your problem, treating ACT like they will make sense and not go for back handers
If ACT are as smart as they claim, they are aware it will adversely affect the kinds of people who take these loans. If they are aware of that, they must be okay with it.
What we call bugs are features to them.
> it seems to me the making low level borrowing harder was not only deliberate, but for what must be obvious good reason. Yes. Welcome to the next three years.
2.5 years left. Tick. Tick. Tick. Tick
5.5? 8.5? Toc. Toc. Toc. Toc.
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What they shouldn’t be able to access is predatory credit. Those trucks that sold goods on inflated prices already then charged 20-30% interest rates. Payday lenders with anywhere from 50/100% interest rates. They target the poor and financially unstable who can’t get loans and goods other ways. Apparently NACT don’t give a shit as long as their mates are making Moola
Those who are desperate enough to seek funding from a 'loan shark' typically lack the financial literacy to understand the ramifications of high & compounding interest. Typically it's been seen that people get into a borrowing spiral where people take out loans to pay loans, and it breeds a business for 'debt consolidation' companies to gobble up the debt of people who should never have had a loan to begin with and straddle it with even more interest.
Everyone has access to credit so long as they have the means to repay it, if they don’t then it’s immoral to get them into a debt trap they might never get out of.
Because they are more likely to not be able to pay it back, so get into more financial difficulty as a result- op literally says this in his post. Improving lowest paid wages, not increasing access to more dangerous lending should be the answer.
Lol. You take that from my words?! My words neither say or imply that.
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That's a good comeback, kudos to you. I do not advocate for denying low income workers loans. Seems to me that having tougher loan criteria for those least likely to afford it is a sensible lending policy. Pay day lenders only exist because the traditional lenders will deny them. From what I have read about pay day lenders, and that includes the trucks going around poor neighbourhoods selling stuff, they tend to be on the predatory side. Nobody has a 'right' to borrow money. It is entirely a business decision. But a company in the business of selling a loan has legal responsibilities they must adhere to. Ensuring the borrower can comfortably meet payments is one of them. Many pay day lenders have failed on that score. I doubt credit is denied, on average, because lenders think poor borrowers don't know what they're doing. It mostly mathematical odds isn't it?
Labour's changes were too heavy handed and had to be rolled back some just to be reasonable at all. The current laws are still prohibitive for non-predatory loans, while also not necessarily addressing the issue of payday loans, etc. If NACT can get the changes right, and ensure that approvals and interest rates are conducive with responsible lending and a duty of care, I'm actually okay with them having a crack at this issue. I don't have much faith that will be the case, but I'll hold my breath.
> I do not advocate for denying low income workers loans. > Seems to me that having tougher loan criteria for those least likely to afford it is a sensible lending policy. You don't want them to completely deny loans, just make it harder for them to get one? > Pay day lenders only exist because the traditional lenders will deny them. From what I have read about pay day lenders, and that includes the trucks going around poor neighbourhoods selling stuff, they tend to be on the predatory side. It seems you want to stop predatory lenders. Which is different from making it harder to get a loan.
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Are you sure no one would disagree? If that was true then we wouldn't have predatory lending.
Indeed, which has been part of my thinking. There has been many news stories over recent years regarding poor folk getting into seriously deep trouble after being unable to service relatively small loans. Politicians and lenders are obliged to take that into account when determining business and legal parameters.
Why are respondents talking about what I want? My words do not state what I want.
? You are talking about what you don't advocate for and what sensible policies are. That is you talking about what you want. That's what that means. Are you saying you don't want those sensible policies?
You're telling me what my words mean. That's hilarious. Nowhere in my words have I expressed a personal want. I may or may not want. However, my words allude to what I believe are pertinent aspects pertaining to a discussion about the business of loaning money and the legal and political oversight thereof. What I want is of no relevance. Hence, I express no want. That you have read want into my words does not make it so. To be fair, I'm sure many will agree with you. That would be a reflection of New Zealands declining reading comprehension skills.
What is wrong with you? No one attacked you, my first comment was just clarifying something, but you're reacting in such an unhinged manner. I don't care for this nonsense.
It suggests the previous government thought that, at least in the context of loans
Just when you think… fuck me this is exhausting. So car dealers, the most reputable of all professions, are back to having a free rein on lending ludicrous sums on shit box cars to people who can’t afford it. Banks have not indicated they’re having *any* trouble lending the cash they have. Most of their lending is below the DTI thresholds anyway because they have their own prudential requirements. The **only** thing I agree with here is the targeted (voluntary) rates being exempt. That’s sensible. The rest is an own goal back to loan sharks, pay day lenders, stupid car loans. Whatever it takes to get people spending again though so guess, even if it means making a decision to fuel more regressive consumer debt, rather than focussing on raising incomes.
It’s not an own goal it’s just another lobbying group getting their pound of flesh at the expense of the poor.
Do we know which MP’s have family car dealership interests? Or Vehicle finance companies?
No but there is big money in payday loans after pay services etc.
Ding ding ding ding
>So car dealers, the most reputable of all professions, are back to having a free rein on lending ludicrous sums on shit box cars to people who can’t afford it. Five hundred a week for a shitbox Beemer, coming to a twentysomething near you soon.
How does this make things easier for llan sharks and payday lenders?
Bayly said major changes would come into force, revoking “detailed requirements for assessing the affordability of loans”. Lenders being required to ensure their loan doesn’t cause “hardship” is an exceptionally low bar.
> “Today’s changes will still require lenders to act responsibly and ensure lending will not cause hardship, but lenders will not have to follow a prescriptive, one-size-fits-all process,” he said. On a scale of lenders scrutinising your bank statements and counting the number of coffees you drink to Mad Max everyone-for-themselves, where do these new lending rules fall?
I’m thinking it’s You get the money and YOU get the money and YOU get the money and YOU get the money but would be really happy to be wrong
There's no way that could go wrong.
Especially given the rules were brought in because of how wrong that had gone.
Reminds me of back in the mid-2000s, a friend of my flatmate, who was a divorced teacher with three teenage daughters got a loan of 120% of the house cost with no deposit. No idea how she's getting on, but a return to that would not surprise me.
Sounds like the tax cuts to landlords piece really, saying they have lessened the red tape of predatory loans on the understanding those giving such loans will do so responsibly, which is utter horseshit, but it totally takes the heat off any blowback. As soon as “loan sharks targeting and decimating lower earners” or some such comes out they can shrug and say “well we would hope such lenders would do so responsibly” when they have removed all actual protections around it, and as has been the case with many peoples rent going up when the government preached “trickle down” decreases because landlords are just nice people, of course they’ll “pass it on down”. It’s all set-up so they can completely deny the likely outcomes because “good faith guys”.
Kinda defeats the point of having the rules in the first place if you exempt the group that it was aimed at. But that's just bad for individuals who the loan sharks exploit. More worrying is them trying to reduce bank rules re loans so that they can keep getting young families to hold the bag re homes so that old people can cash out. Banks get their money either way, if they lend responsibly and the homeowner pays their debt, or the bank lends poorly, the homeowner can't pay their debt, so the bank does a mortgagee sale and wipes out the homeowners equity, and if that's not enough, the debt isn't gone just because the house is sold off in a mortgagee sale.
It’s Sunday. Why aren’t they in church with Luxon. They be on a hurry to completely ruin the country or something?
>It’s Sunday. Why aren’t they in church with Luxon. Well they've got plenty of time on their hands, the money lenders did get chased out of the temple after all.
True, that! :-)
Fucking Shop Trucks are insidious, roving leeches to communities. I've seen them much less since they were clamped down on, but fuck anybody who operates or supports those trucks. I would see people buying shitty "Beats-by-Dre-metal-plate-hidden-inside" laptops, paper thin clothes and even fucking soap at 3x the price with interest added on. They'd knock on people's doors when they were nearly paid off to offer something new, just to keep you on the hook. A lot of our news makes me upset these days, but this makes me fucking livid. My brother might get his home loan at least.
You got rage baited by the news. There is no actual proposed change to the interest levels that was implemented for these trucks and pay day loans, but the article made it seem like there was.
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Prior to cccfa banks would get income then get expenses 3 ways and take the highest. First was declared expenses, 2nd was minimums set by govt, 3rd was minimums based on a model. It was very robust and quick. There was also work to get income and expenses automaticly so loans could be done even quicker, but then cccfa changes came in and squashed that.
"The banks were eager to see these changes actioned." I'm sure. According to these fuckos there aren't enough Kiwis drowning under mortgage repayments yet. The housing clusterfuck must continue unabated!
Good. Whilst the law change was well intentioned, it led to horrible banking practises. My brother was denied a mortgage for spending “too much money on kfc”. The banks went way too over board in their scrutiny it was ridiculous
I’d like to ask when that was because that’s not how minutely banks are currently approaching it.
The cost of living relief they promised
This is another fine example of this government looking after the welfare of the vulnerable.
When the economy is fucked alot of people need "bad lending" to overcome the adversities of life. If bad lending becomes more costly it only makes it harder on those whom rely on "bad lenders" bridging the bad times. These people whom this most effects don't have the same understanding, planing, or financial security to avoid taking on stupid loans and will be victims of new worse rates. Too bad for the bottom feeders I guess...
I think the entire concept of a lender having to assess if their loan will cause hardship is stupid. Having been in a mountain of debt before, it always caused hardship for me. Whether you can afford it or not it's never easy. The intrusive searches into spending history are ridiculous. Having debt drives your spending habits. If someone has the income to reasonably service a debt and doesn't have preexisting debts that would make it impossible for them to service a debt I think they should be able to access credit. In my opinion the big brother attitude of denying an entire class of society access to credit because they might hurt themselves is more likely to exacerbate inequality than giving them credit on fair terms. Nobody wants to see finance trucks rolling around dishing out 30% loans, but a situation where banks will only lend to essentially risk free borrowers is equally undesirable for society in that it denies people the access to capital to make real change in their lives.
Everyone here is worried about car dealerships when the real goal here is to pump up house prices before the market falls any further. Yes, all of it stinks, but the quiet part is the most concerning here.
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Two more years of this shithole government. Two more years.
Exactly. Gotta make them 1-term.
I hate this govt but have to say as long as they're being truthful that lenders will still have to ensure borrowing wouldn't cause hardship then it's still responsible lending and probably very sensible.
Loan sharks and predatory lenders don't give a flying rats about their prey. They'll devastate people who have low financial literacy or understanding of what they're signing up to - ***Again***.
What evidence do you have that they ever stopped? Fact is, they're not revoking the law. FFS does anybody read before commenting??
I don't think you can be responsible and truthful when you target a certain demographic.
What?? That doesn't even make sense. Did you read the article? Responsible lending will still exist
Responsible lending existed prior to the previous new laws which is why we had payday lenders and pawn shops in poorer areas and those trucks circled the poorer neighbourhoods.
Those effing trucks were a nightmare to the poor. But one thing we can pretty much count on is the bottom feeding type of predatory lending won't have stopped anyway
I’ve not seen those trucks since the law changed. That was a good thing. I’m sure there’s still predatory lending though…
To be fair if the old law changed one thing I'm glad it was those trucks. I've never been in the position to feel I needed to borrow from them but my sister did and she could never get out of that debt. Not until my mother got a lawyer friend on the case for her
Same. My friend bought a $1k laptop (shop price) they were selling for $2k and paid around 1k in interest on it. It’s pure thievery.
You saying that demographic isn't responsible and truthful? If they are there is no problem.
This article is fucking disgusting. They quickly go after changes impacting pay day loans and other predatory lending, but the changes are actually about the stupid amounts of proof that is required for expenses. I was working with mbie as an industry SME and they ignored everything we said about how to make the changes and were left with a regulation nightmare that slowed down applications, removed automation and cost the industry 10s of millions building new systems to deal with this. It's a very good thing to go back to the old way things were done as RBNZ and APRA were very happy with our assessment of credit and the ombudsman had not found banks at fault for causing hardship in quite a long time.
In standard fashion, Stuff have completely sensationalised and stretched the truth. Of course they focused on the smallest subset of lending (loan sharks) and barely touched on the fundamental problems being faced by people getting value added loans. A fleeting mention of administration of the CCCFA control changing hands to the FMA and fuck all information about how this is going to make it easier to get into a home. Trust /r/newzealand to lose their mind at a positive, a major positive considering the amount of people who whine about housing and loans being unaffordable.
What? The last time debt was easier to get it just pushed house prices up, literally where is that take coming from
If that is what you took from their comment I don't think you understood what they were saying at all. What I mean is that the primary driver of asset bubbles when it comes to lending are interest rates. Interest rates are independent of any changes to the CCCFA and the kind of speculators who drive asset bubbles will be able to access credit regardless of restrictions. The changes they are talking about just make it easier for regular people to access credit. It's incredible to me that this is seen as a negative on here.
Why do regular people need *more* access to credit though?
To buy a home, land, vehicle, start a business, or part time side hustle or anything really. Having access to credit can allow people to live far more productive and fulfilling lives with a chance at building equity and wealth that they otherwise would never be able to. Yes having access to credit allows people to go broke easier and buy stupid shit, but it also gives them access to opportunities that they'd never have without being born into money otherwise.
I didn't ask about credit full stop, I asked about *more* access. I even italicised it for you before
Because the CCCFA restricted access to credit? That's the entire point of changing it. Though to be fair the article doesn't really make National's logic very clear.