FinCap welcome’s the Government’s announcement that they are bringing forward the introduction of the 100% repayment limit and ban on compounding interest for high cost loans, and the $30 cap on default fees for all loans, through the COVID-19 Response (Taxation and other Regulatory Urgent Measures) Bill going through Parliament today .
FinCap, Chief Executive Tim Barnett says, “While people have been careful not to borrow during Alert Level 4 despite challenges with their cash flow, as economic activity increases, we are likely to see an uptake in lending again, particularly high cost lending.
“We are disappointed that the Government has not included the 0.8% a day interest rate cap in their announcement today. This is an important feature of the limits to high cost lending and are designed to work together with the 100% repayment limit.
“We look forward to seeing this 0.8% a day interest rate cap introduced on 1 June 2020.
“We ask the Government to work swiftly to introduce the regulations that accompany these caps including improved affordability assessments and fit and proper tests for lenders.
“These measures protect all borrowers, not just people borrowing high cost loans. When new lending starts to occur people that borrow on their credit cards, through personal loans deserve protection as well.”
If people are in financial hardship or have experienced changes with your income or expenses, please contact the MoneyTalks helpline on 0800 345 123 or through www.moneytalks.co.nz. The wider Government financial support package can be found on at covid19.govt.nz.