The Commerce Commission has urged lenders to be responsible with their increased flexibility and payment deferrals, and has reminded them of their obligations under the CCCFA.
Commission Chair Anna Rawlings acknowledged that the COVID-19 outbreak will have a serious impact on borrowers and lenders, and has urged that lenders continue make sure they are providing “appropriate access” to lending. The Commission has issued guidance for both lenders and borrowers operating during the pandemic, and has emphasised responsibility and ensuring that lending is affordable and suitable for the customer.
“Lenders will want to provide additional support and flexibility to financially stressed borrowers at this time and the scale of borrowers’ needs is expected to be unprecedented,” Rawlings said.
“Appropriate access to credit should be facilitated and maintained while borrowers’ interests are also properly protected.”
Rawlings says the Commission’s approach to enforcing the CCCFA will be “informed by the circumstances,” but that lenders are expected to act reasonably and apply the CCCFA’s requirements.
The Commission has also issued an information document for borrowers which outlines all the government and bank assistance available, and offers guidance on what to do if suffering financial hardship and how to choose a loan provider.
“Many people will need to take on more debt at this time, and we know that may be inevitable,” Rawlings said.
“However, we want to provide as much information as we can to help people avoid becoming overwhelmed by debt.”
“We want to help borrowers by providing information to them about other options as well as loans,” she added. “The other options include government financial support, and directing them towards services which can help them manage credit, such as financial mentors.”