Source: MIL-OSI Submissions
New Zealand Finance Sector – Iwi leaders join coalition for loan shark reform as BERL report shows Government’s answer is too weak
FinCap has welcomed the decision by the Iwi Chairs Forum to join with nine other national organisations in pressing the Government to strengthen its proposed loan shark law.
The call comes as FinCap releases a new report by BERL that highlights the need for the government to add an interest rate cap to the legislation.
FinCap CE Tim Barnett says the breadth of support for strong law shows how important it is the Government delivers. “The government needs to listen to the people who see the damage predatory lending does. Every major front-line organisation has joined the call for an interest rate cap, the work that has been done by BERL shows it is needed, it’s time for the government to put one in place.
“The work by BERL shows that the Government’s plan to limit the total cost of loans is a good thing, but it will have little effect if it is not accompanied by a cap on the maximum interest rate that can be charged.
“Government’s claim their total cost limit means there’s no need for an interest rate cap is like claiming you don’t need the left gumboot because you already have the right one on.
“An interest rate cap is the difference between facing the hardship of paying 200% of a loan back in a matter of weeks or having time to pay it back sustainably over a longer time. Without a cap borrowers and their children will continue to have to choose between basics like food and electricity and debt repayment.
“The front-line services want it, the research shows its needed. Now the Government must act.”