Coddington Deborah: Credit Contracts and Consumer Finance Bill — In Committee 
Coddington Deborah: Credit Contracts and Consumer Finance Bill — In Committee 
[Volume:611;Page:8701] 
DEBORAH CODDINGTON (ACT NZ) 
: 
 I rise to address Part 1 which deals with the purposes of this bill. One of the purposes—and I have to agree with the National Party on this; it has discovered a serious loophole in this legislation—is to provide for the disclosure of adequate information to consumers. What that does not deal with is a situation where a broker is involved in a deal. Let us suppose that a consumer wants to borrow $5000 and goes to a broker. The broker takes 10 percent—$500—and the borrower or consumer gets $4500. How that works is that the person who is actually lending the money sends a cheque for $500 to the broker. That $500 does not get declared so the purposes clause is inadequate. There is no ceiling on the percentage commission a broker can charge. 
I have been told of a brokerage in Hawke’s Bay that routinely charges 20 percent commission. That 20 percent commission will never be declared so there is no way that this bill should proceed as currently written because every small finance company will now set up its own brokerage. 
Mark Peck 
: No we won’t. Has the member read the bill? 
DEBORAH CODDINGTON 
: The little member over there says: “No we won’t.” Perhaps he can take a call. [ 
Interruption 
] If he would like to wait he could take a call and explain to the Committee why they will not want to do that. If I was a small finance company that is exactly what I would be doing. Those percentages will not be declared and this bill will not protect consumers. The Hon Tony Ryall raised a very valid point and that is why we have the Committee of the whole House to address these matters clause by clause. It is not for the chairman of the select committee to pipsqueak away saying: “No we won’t! No we won’t!” 
The other issue I want to deal with under the purposes clause is the hardship provision. The select committee wrote to all submitters and asked them to come back on that provision. The creditors were uniformly opposed to it but we have seen it come through anyway. That is increasingly how this Labour Government operates. It has a farce of a submissions process and the submissions are ignored. What we will see is a drastic change to credit in this country whereby if debtors decide that it is all just a bit too hard and they cannot pay back what they borrowed then they can apply to have the terms of their contracts changed. 
Darren Hughes 
: What are the rules in Cambridge? 
DEBORAH CODDINGTON 
: That member talks about Cambridge. I do not think that he would ever be invited to go a university like Cambridge or Oxford. 
The bill refers to any hardship such as illness injury—[ 
Interruption 
]—what is more they want me to go back—loss of employment or the end of a relationship. United Future the family party supports this bill. 
What will we see from this bill? We will see more relationships ending so that people can claim that as a reason for getting out of paying their debts. If the creditor declines their application what do they do? They can claim— 
Darren Hughes 
: We’ll show this  
Hansard 
 to your husband. 
DEBORAH CODDINGTON 
: I do not have a husband. They can apply to the court to have the terms of the contract set aside. This Labour Government might be genuine; I will give it the benefit of the doubt. Those members might be genuine in trying to help consumers but in the long run those hardship provisions will not protect consumers. The cost of credit will go up and consumers will be hurt by that.