Lending law changes ahead

A government bill designed to deliver “simpler, clearer and more workable lending laws” by amending the Credit Contracts and Consumer Finance Act (CCCFA) has passed its third reading in parliament.

The changes, which affect motor-vehicle finance providers and agents, aim to cut compliance costs and will transfer regulatory responsibility for credit contracts and consumer finance from the Commerce Commission to the Financial Markets Authority (FMA) from July 1. 

Cameron Brewer, Commerce and Consumer Affairs Minister, says: “New Zealanders should be able to access affordable finance when they need it, whether they’re buying a home, renovating, upgrading a car, or managing household costs.

“But under Labour’s CCCFA changes, lending became harder, slower, and more frustrating than it needed to be. Borrowers were put through intrusive and unnecessary checks, lenders became overly cautious, and good Kiwis were left jumping through hoops just to get a loan.

“These rules were meant to protect consumers. Instead, they created complexity, confusion, and cost.

“This Government promised to bring common sense back to lending, and today we have delivered.

“We are simplifying the rules, reducing unnecessary compliance costs, and supporting a more competitive lending market. That means better access to credit, more choice, and more affordable finance for consumers.”

The Credit Contracts and Consumer Finance Amendment Bill was introduced to parliament in March 2025 and passed its third reading under urgency on May 30 this year. It will now go to the Governor-General for royal assent.

The bill was supported by National, Act and New Zealand First, but opposed by members of the Labour and Green parties, and independent MPs Takuta Ferris and Mariameno Kapa-Kingi.

Brewer, pictured, says transferring responsibility for credit regulation to the FMA will bring companies into its licensing regime and create a clearer, more consistent regulatory system.

“We are also removing unnecessary personal liability for senior managers and directors and making consequences for certain disclosure breaches more proportionate. Accountability remains, but the rules need to be workable and fair,” he adds.

Meanwhile, consumer protection is being enhanced through the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill, which also passed its third reading last week.

Brewer explains the bill improves accountability across financial dispute resolution schemes by allowing for more consistent independent reviews and minimum requirements for scheme board members, “including skills, experience, and independence from industry”.

“Together, these bills are about restoring balance,” he continues.

“We are fixing the basics, reducing unnecessary red tape, and building a more competitive economy. 

“We have turned the page on Labour’s bad CCCFA settings and delivered clearer rules, stronger competition, better access to finance, and proportionate consumer protection.”

Seamless transition

The FMA and Commerce Commission have both welcomed the third reading of the Credit Contracts and Consumer Finance Amendment Bill and the upcoming change in regulatory responsibility.

Clare Bolingford, FMA executive director, licensing and conduct supervision, says it is an important step towards a more streamlined regulatory environment for the financial services sector, offering greater clarity and efficiency for industry and consumers.

“This isn’t just a change in oversight – it’s a move toward a more connected and co-ordinated approach to regulating financial market conduct,” she adds. 

“By aligning credit regulation with broader financial services, we’re creating a framework that better supports responsible lending and consumer protection.

“Introducing a licensing regime for lenders will give the FMA more ways to monitor and supervise lending activity, and will provide a wider set of regulatory tools to support effective oversight.”

Bolingford notes the FMA believes regulation works best when it’s built on strong relationships. 

“As an engagement-led regulator, we’ll work closely with lenders and industry stakeholders to ensure the financial services sector delivers fair outcomes and earns the trust of businesses, consumers, and investors.  

“We will, however, use our full range of regulatory and enforcement powers where we find misconduct that has – or is likely to – harm consumers.”

The FMA and commission are working together to ensure a seamless transition as July 1 approaches and this includes the transfer of experienced credit staff from the commission to the authority. 

“We’ve also put in place robust governance and security protocols to manage the transfer of information from the Commerce Commission, ensuring that data integrity and privacy are protected every step of the way,” explains Bolingford.

The commission says the passage of the bill last month provides clarity for industry and consumers, and it is focused on supporting a smooth handover of responsibilities.

Sarah Bartlett, acting general manager, office of the board and chief executive, adds: “We are proud of our last 20 years as the regulator of the consumer credit function and the dedicated work of our people at the commission. 

“They have played a critical role in ensuring lenders’ compliance with the act and taking enforcement action where necessary.

“Combined, their expertise, relationships and commitment to consumer protection have shaped the credit landscape and supported fairer outcomes for New Zealanders.”

The commission is reminding lenders and consumers to continue engaging with it on CCCFA matters until July 1.