Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698840789189.pdf (New Zealand)
2015/57 Credit Contracts and Consumer Finance Amendment Regulations 2015 Jerry Mateparae, Governor-General Order in Council At Wellington this 23rd day of March 2015 Present: His Excellency the Governor-General in Council Pursuant to section 138(1) of the Credit Contracts and Consumer Fi- nance Act 2003, His Excellency the Governor-General makes the following regulations, acting— (a) on the advice and with the consent of the Executive Council; and on the recommendation of the Minister of Commerce and Con- sumer Affairs made in accordance with section 138(1A) of the Credit Contracts and Consumer Finance Act 2003.
Contents Title Commencement Principal regulations New regulations 4A to 4D and cross-heading inserted Page 2 2 2 2 1 (b) 1 2 3 4 r 1 Credit Contracts and Consumer Finance Amendment Regulations 2015 2015/57 Publication of costs of borrowing information Publication of costs of borrowing information Information about interest rates Information about charging interest Information about credit fees and default fees 4A 4B 4C 4D New regulation 4E and cross-heading inserted Minimum repayment warning Minimum repayment warning 4E New regulations 7A and 7B and cross-headings inserted Rebate of repayment waiver 7A Rebate of repayment waiver Rebate of extended warranty 7B Rebate of extended warranty New regulation 18 and cross-heading inserted 18 Exemptions Exemptions from provisions relating to consumer credit contracts where local authority to provide credit Schedule 2 replaced Schedule Schedule 2 replaced Regulations 3 3 4 5 5 5 6 6 6 7 7 8 9 Title These regulations are the Credit Contracts and Consumer Fi- nance Amendment Regulations 2015.
Commencement These regulations come into force on 6 June 2015.

Principal regulations These regulations amend the Credit Contracts and Consumer Finance Regulations 2004 (the principal regulations).
New regulations 4A to 4D and cross-heading inserted After regulation 4, insert: 5 6 7 8 1 2 3 4 2 2015/57 Credit Contracts and Consumer Finance Amendment Regulations 2015 r 4 “Publication of costs of borrowing information “4A Publication of costs of borrowing information “(1) This regulation applies for the purpose of section 9K of the Act.
“General rules “(2) The information required to be made publicly available (costs of borrowing information) must contain, for every class of credit contract offered by the creditor, the information pre- scribed by regulations 4B to 4D.
“Rules about publication on Internet sites “(a) “(3) To meet the requirements under section 9K(3)(a) of the Act,— each part of the costs of borrowing information for a class of credit contracts must be presented with the other parts of the costs of borrowing information for that class of credit contracts in a form that enables a borrower to ascertain readily the total costs of borrowing (for ex- ample, interest rates and fees for a class of credit con- tracts may be presented together on the same webpage or with prominent links provided between them); and the costs of borrowing information must be accessible at all reasonable times.
“(b) “Rule when information supplied on request “(4) Costs of borrowing information that is supplied to a requestor under section 9K(4) of the Act must include the date from which the information applies (for example, fees current as at [date]) or the date on which the information is supplied.
“4B Information about interest rates “(1) The costs of borrowing information must include— “(a) “(b) “(c) “(d) the annual interest rate or rates (with the rate or rates being expressed in terms of a percentage); and if there is more than 1 rate, how or when each rate ap- plies; and if an annual interest rate is fixed for a period, the period during which the annual interest rate is fixed; and if an annual interest rate is variable or adjustable, a state- ment to that effect.
3 r 4 Credit Contracts and Consumer Finance Amendment Regulations 2015 2015/57 “(2) The rate or rates made publicly available in the costs of bor- rowing information— “(a) must be the rate or rates that are ordinarily available to borrowers who meet the lender’s borrowing require- ments for that class of credit contracts; and “(b) must be the current annual interest rate or rates, if the rate is variable or adjustable; and “(c) must, if expressed by reference to a range, be accom- panied by a brief description of the factors that the lender may consider to determine the specific interest rate for particular classes of borrower.
“(3) “(4) If a higher interest rate than the rate or rates made publicly available under subclauses (1) and (2) may apply to a specific borrower (or class of borrowers) or in specific situations, the costs of borrowing information must include— “(a) “(b) a statement to that effect; and a brief description of the factors that the lender may con- sider to determine the specific interest rate for that bor- rower or those borrowers or situations (if applicable); and the margin (or maximum margin) that may be added or the interest rate (or maximum interest rate) that may apply (if known).
“(c) If a higher interest rate may be imposed under the contract in the event of a default in payment or the credit limit being exceeded, this regulation applies as follows: “(a) references to annual interest rate include the default interest charge rate; and the creditor must make the costs of borrowing informa- tion for the default interest charge rate publicly avail- able in accordance with this regulation separately from the information on the annual interest rates.
“(b) “4C Information about charging interest “(1) The costs of borrowing information must include a brief de- scription of the frequency with which interest charges may be debited under the contract.

“(2) However, the costs of borrowing information need not include that description if interest charges will always be debited as 4 2015/57 Credit Contracts and Consumer Finance Amendment Regulations 2015 r 5 frequently as, or less frequently than, payments become due under the contract.
“4D Information about credit fees and default fees The costs of borrowing information must contain a description of the credit fees and default fees that are, or may become, payable, including— “(a) when each fee is, or will become, payable; and “(b) the amount (or maximum amount) of each fee if ascer- tainable, or, if not, the method of calculation of the fee.” 5 New regulation 4E and cross-heading inserted Before the cross-heading above regulation 5, insert: “Minimum repayment warning “4E Minimum repayment warning “(1) For the purposes of section 19(i) of the Act, the prescribed minimum repayment warning required in the case of a credit card contract is as follows: “ ‘If you make only the minimum payment each month*, you will pay more interest and it will take you longer to pay off your balance.
Visit www.sorted.org.nz/creditcards to calculate how you can pay off your credit card balance faster and pay less in interest.

“ ‘*Replace with other payment period, if applicable.’ “(2) The format, font, and font size of the minimum repayment warning must be easily readable.

“(3) The minimum repayment warning must be presented reason- ably close to the amount stated as the minimum payment for each payment period.
“(4) No minimum repayment warning is required to be included in a continuing disclosure statement in the case of a credit card contract if— “(a) “(b) the closing unpaid balance is below $100; or a payment arrangement between the creditor and debtor replaces the minimum payment that would otherwise be required under the contract to be paid in each payment period; or 5 r 6 Credit Contracts and Consumer Finance Amendment Regulations 2015 2015/57 “(c) an interest-free period applies to the closing unpaid bal- ance.
“Compare: National Consumer Credit Protection Regulations 2010 r 79B (Aust)”.
6 New regulations 7A and 7B and cross-headings inserted After regulation 7, insert: “Rebate of repayment waiver “7A Rebate of repayment waiver For the purposes of section 52A of the Act, the rebate for the repayment waiver must be calculated in accordance with the following formula: y = (p × s × (s + 1)) ÷ (t × ( t + 1)) where— y is the amount of the rebate of the consideration paid for the repayment waiver is the amount of the consideration paid for the repay- ment waiver is the number of whole months in the unexpired portion of the period for which the repayment waiver applied is the number of whole months for which the repayment waiver applied.
p s t “Rebate of extended warranty “7B Rebate of extended warranty For the purposes of section 52B of the Act, the rebate for the extended warranty must be calculated in accordance with the following formula: y = p × s ÷ t is the amount of the rebate of the consideration paid for the extended warranty is the amount of the consideration paid for the extended warranty is the number of whole months in the unexpired portion of the period for which the extended warranty applied where— y p s 6 2015/57 Credit Contracts and Consumer Finance Amendment Regulations 2015 r 7 t is the number of whole months for which the extended warranty applied.
7 New regulation 18 and cross-heading inserted After regulation 17, insert: “Exemptions “18 Exemptions from provisions relating to consumer credit contracts where local authority to provide credit “(1) A credit contract is exempt from the application of the provi- sions of the Act that are listed in subclause (2) if— “(a) the contract provides for a local authority to provide credit in connection with the funding of an activity on a rating unit; and the contract provides that the creditor is to collect the amounts payable under the contract to the creditor by means of a targeted rate on the rating unit.
“(2) The provisions of the Act referred to in subclause (1) are as “(b) follows: “(a) “(b) “(c) “(d) “(e) section 18 (continuing disclosure): section 38 (early debit or payment of interest charges prohibited): section 41 (unreasonable credit fee or default fee) as it applies in relation to default fees: section 51 (amount required for full prepayment): subpart 8 of Part 2 (changes on grounds of unforeseen hardship).
“(3) The exemptions given by subclause (1) do not apply if— “(a) “(b) a person other than a local authority is a creditor under the contract; or credit is provided under the contract otherwise than in connection with the funding of the activity on the rating unit; or the contract is a revolving credit contract.
“(4) The exemption given by subclause (1) from the application of section 18 of the Act is subject to the condition that the cred- itor complies with section 18(1) of the Act as if the maximum period for a continuing disclosure statement were 12 months.
“(c) 7 r 8 Credit Contracts and Consumer Finance Amendment Regulations 2015 2015/57 “(5) The exemption given by subclause (1) from the application of subpart 8 of Part 2 of the Act applies only if— “(a) “(b) the local authority that sets (or is to set) the targeted rate has a rates remission policy adopted under section 109 of the Local Government Act 2002 or a rates postpone- ment policy adopted under section 110 of that Act; and the objectives stated in the adopted policy in accordance with section 109(1)(a) or 110(1)(a) of the Local Govern- ment Act 2002 include— “(i) an objective of assisting ratepayers whose ability to pay their rates is impaired because they are in financial difficulty; or an objective that is substantially the same as the objective referred to in subparagraph (i).
“(ii) “(6) In this regulation,— “local authority has the meaning given by section 5 of the Local Government (Rating) Act 2002 “rate has the meaning given by section 5 of the Local Gov- ernment (Rating) Act 2002 “ratepayers is to be read in accordance with section 10 of the Local Government (Rating) Act 2002 “rating unit means a rating unit for the purposes of the Rating Valuations Act 1998 “targeted rate means a rate set under section 16 of the Local Government (Rating) Act 2002.
“(7) This regulation applies only to credit contracts entered into on or after 6 June 2015.” Schedule 2 replaced Replace Schedule 2 with the Schedule 2 set out in the Schedule of these regulations.
8 8 2015/57 Credit Contracts and Consumer Finance Amendment Regulations 2015 Schedule Schedule Schedule 2 replaced Schedule 2 Model disclosure statements Form 1 r 8 r 12 9 Schedule Credit Contracts and Consumer Finance Amendment Regulations 2015 2015/57 Form 1—continued 10 2015/57 Credit Contracts and Consumer Finance Amendment Regulations 2015 Schedule Form 1—continued 11 Schedule Credit Contracts and Consumer Finance Amendment Regulations 2015 2015/57 Form 1—continued 12 2015/57 Credit Contracts and Consumer Finance Amendment Regulations 2015 Schedule Form 1—continued 13 Schedule Credit Contracts and Consumer Finance Amendment Regulations 2015 2015/57 Form 2 14 2015/57 Credit Contracts and Consumer Finance Amendment Regulations 2015 Schedule Form 2—continued 15 Schedule Credit Contracts and Consumer Finance Amendment Regulations 2015 2015/57 Form 2—continued 16 2015/57 Credit Contracts and Consumer Finance Amendment Regulations 2015 Explanatory note Form 2—continued Michael Webster, Clerk of the Executive Council.
Explanatory note This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on 6 June 2015, prescribe matters necessary to the operation of new obligations and responsi- bilities introduced by amendments to the Credit Contracts and Con- sumer Finance Act 2003 (the CCCFA) made by the Credit Contracts and Consumer Finance Amendment Act 2014.
The regulations also provide for certain exemptions from the application of certain provi- sions of the CCCFA.

17 Explanatory note Credit Contracts and Consumer Finance Amendment Regulations 2015 2015/57 • • Publication of costs of borrowing information Regulation 4 prescribes the costs of borrowing information that cred- itors must make publicly available pursuant to new section 9K of the CCCFA.
That section requires every creditor— • to ensure that information about all the costs of borrowing in relation to every class of credit contracts offered by that cred- itor is publicly available; and to display prominently and clearly on the creditor’s Internet site the credit fees, default fees, and annual rates of interest (and default interest charge rates) in relation to every class of credit contracts (if the creditor has an Internet site); and to display prominently and clearly on any of its business premises that are accessible to the public a notice that a copy of the information about those credit fees, default fees, and rates is available on request (free of charge); and immediately after receiving the request of any person, to sup- ply a copy of that information, free of charge, to that person.
The information prescribed by regulation 4 is based on that pre- scribed by Schedule 1 of the CCCFA as the information that must be disclosed to individual debtors, but is tailored to reflect the fact that key information relates to a specific borrower entering into a particular contract, while costs of borrowing information is intended to ensure creditors publish generic information about credit products so that consumers can compare the different products easily.
• Credit card minimum repayment warning Regulation 5 prescribes the credit card minimum repayment warning that continuing disclosure statements for credit card contracts are re- quired to contain under amended section 19 of the CCCFA.
Proportionate rebate formula Regulation 6 prescribes the proportionate rebate formula to be used to calculate the portion of the consideration paid for a repayment waiver and an extended warranty that must be applied to reduce the amount required for full prepayment, according to section 51 of the CCCFA.

18 2015/57 Credit Contracts and Consumer Finance Amendment Regulations 2015 Explanatory note Exemptions Regulation 7 gives exemptions in relation to “VTR schemes”.
In general terms, these are schemes run by local authorities under which credit may be provided to a ratepayer to fund work on a rating unit for the ratepayer’s benefit.

The credit contract is administered through the rates system.

New regulation 18(1) sets out the following 2 requirements that must be met in relation to a credit contract for it to be exempted: • the contract provides for a local authority to provide credit in connection with the funding of an activity on a rating unit.
See section 6 of the CCCFA for the definition of credit.

New regu- lation 18(6) defines local authority by reference to section 5 of the Local Government (Rating) Act 2002 (the LG(R)A 2002).

New regulation 18(6) defines rating unit by reference to the Rating Valuations Act 1998.

Generally, any parcel of land for which there is a certificate of title is a rating unit (see sections 5B and 5C of the Rating Valuations Act 1998).
Rates set by local authorities under the LG(R)A 2002 are set by reference to rating units: the contract provides that the creditor is to collect the amounts payable under the contract to the creditor by means of a tar- geted rate on the rating unit.

New regulation 18(6) defines targeted rate by reference to section 16 of the LG(R)A 2002.
Under that section, a targeted rate may be set by a local author- ity for specific activities identified in the authority’s funding impact statement and need not be set in relation to all rateable land in the authority’s district.

• New regulation 18(2) lists the provisions of the CCCFA from which an exemption is given.

All the provisions are contained in Part 2 of the CCCFA, which regulates consumer credit contracts (see subpart 1 of Part 2).
The provisions are as follows: • section 18, which requires the creditor under a consumer credit contract to disclose certain information to the debtor at least once every 6 months.
New regulation 18(4) makes this ex- emption subject to the condition that the creditor discloses the required information at least once every 12 months: section 38, which provides that a creditor under a consumer credit contract must not require the payment of, or debit, an • 19 Explanatory note Credit Contracts and Consumer Finance Amendment Regulations 2015 2015/57 • • • interest charge at any time before the end of the day to which the interest charge applies: section 41, which provides that a consumer credit contract must not provide for unreasonable credit or default fees.
This exemption applies only in relation to default fees: section 51, which limits the amount that may be required for the full prepayment of a consumer credit contract: subpart 8 of Part 2, which gives a debtor under a consumer credit contract rights to request changes to the contract if the debtor is suffering hardship as a result of, for example, illness or loss of employment.
New regulation 18(5) provides that this exemption applies only if the local authority that sets (or is to set) the targeted rate has a rates remission policy adopted under section 109 of the Local Government Act 2002 or a rates postponement policy adopted under section 110 of that Act.
A local authority with a rates remission policy may remit rates on a rating unit under section 85 of the LG(R)A 2002 and a local authority with a rates postponement policy may postpone the requirement to pay rates on a rating unit under section 87 of the LG(R)A 2002.
New regulation 18(5) requires the adopted policy to have an objective of assisting ratepayers whose abil- ity to pay their rates is impaired because they are in financial difficulty or an objective that is substantially the same as that objective.

New regulation 18(1) and (2) is supplemented by new regulation 18(3), which provides that the exemptions do not apply in certain circumstances.
Model disclosure statements Regulation 8 prescribes updated forms for the model disclosure state- ments to reflect new initial disclosure obligations and timeframes that are prescribed by the amended CCCFA, pursuant to amended section 17 of the CCCFA.

20 2015/57 Credit Contracts and Consumer Finance Amendment Regulations 2015 Explanatory note Statement of reasons The following statement of reasons is published for the purposes of section 138(1B) of the Credit Contracts and Consumer Finance Act 2003.
The Minister of Commerce and Consumer Affairs, having had regard to the purposes of the Credit Contracts and Consumer Finance Act 2003 set out in section 3 of that Act as required by section 138(1A)(a) of that Act, and being satisfied as to the matters set out in section 138(1A)(b) and (c)(ii) of that Act, considers the exemptions given by regulation 7 of these regulations to be appropriate because— • the provisions of the Act from which the exemptions are given overlap with similar requirements set out under local govern- ment legislation; and exempting VTR scheme providers from these provisions is un- likely to cause detriment to debtors as local government legis- lation provides sufficient protections for debtors in each case.
The purposes of the Act to protect the interests of consumers and promote their confident and informed participation in mar- kets for credit will continue to be met; and requiring VTR scheme providers to comply with the overlap- ping requirements of the Act and local government legislation would require councils to comply with onerous and burden- some requirements.
Councils would have to change the way they administer VTR schemes to comply, which would result in unnecessary compliance costs that may be passed on to bor- rowers.

• • Regulatory impact statement The Ministry of Business, Innovation, and Employment produced regulatory impact statements in January 2015 to help inform the de- cisions taken by the Government relating to the contents of this in- strument.
Copies of these regulatory impact statements can be found at— • http://www.consumeraffairs.govt.nz/legislation-policy/pol- icy-reports-and-papers/regulatory-impact-statements 21 Explanatory note Credit Contracts and Consumer Finance Amendment Regulations 2015 2015/57 • http://www.treasury.govt.nz/publications/informationre- leases/ris Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 26 March 2015.


These regulations are administered by the Ministry of Business, Innovation, and Employment.

12 22 Wellington, New Zealand: Published under the authority of the New Zealand Government—2015