Willis NicolaNICOLA WILLIS (National): National supports this bill because we want to see more informed borrowers we want to see more responsible lenders and we believe that changes are going to be helpful to further both of those goals. I want to talk first about the concept of more informed borrowers because the lending of finance in the economy works within a market. But a market can only work effectively in this case if the borrowers are informed effectively because if they are not informed then the potential for unscrupulous practice is too great and the risk to individual consumers is there. So when we talk about more informed borrowers we've had the previous speaker talk about the example of people who take loans not knowing necessarily the way in which they will accumulate interest and that they will grow over time. I want to acknowledge here that while this bill does some useful things to help inform borrowers better the other aspect of this that I think the bill really does rely on is increasing efforts to increase the financial literacy of New Zealanders and I want to acknowledge the role the private sector our banks and financial institutions are actually playing in furthering financial literacy within our communities. But the second thing of course that's vital is that even if we have informed borrowers we still need to guard against the possibility of irresponsible lenders and the bill takes a number of measures in that regard—for example around being far more prescriptive about what a lender must do when they're assessing the affordability and suitability of a loan. I want to again take a particular example here which is that of the mobile traders which have been spoken about in this debate and this is this practice that's emerged of people taking trading entities around communities where there is deprivation or there is vulnerability and providing them access to household goods when they know that they've run out of cash at the end of the week but doing so in very high interest arrangements that further get families into debt and can become a terrible burden for them. While this bill will do some important things to reduce the possibility of that by increasing the requirement on lenders to assess whether or not people can take on that loan I also want to acknowledge the role of other entities here—for example the Salvation Army who have said Well obviously there is a need here in the community for the availability of mobile goods. People are prepared to take out these excessive loans in order to access household goods at certain times in their pay cycle. How can we step into this breach? How can we step into this space to make sure that if lending dries up in this area there is an alternative for these families?" I do want to take this opportunity to commend the Salvation Army on that action.But the third thing that I know the Finance and Expenditure Committee considered carefully in examining this bill was the balance between regulating appropriately but then the possibility that over-regulation actually creates a black market that is completely unregulated. It's for that reason that previous speakers have noted concerns about the introduction of the interest rate cap which officials had advised against. The questions I understand that were asked at the select committee were simply: would that push some forms of lending underground? I think it's important that the House notes the need to watch that carefully because the potential there of course is that there are a group of consumers a group of borrowers who end up in worse situations more pernicious situations because the availability of credit on the regulated market is so constricted.So as I said at the outset National wants to have more informed borrowers. We want more responsible lenders. This bill furthers a number of small steps forward that further those goals and for that reason we support it."