Hudson BrettBRETT HUDSON (National): It is a pleasure to speak on this the Consumer Guarantees (Removal of Unrelated Party Lender Responsibility) Amendment Bill. I would like to congratulate my colleague Dr Reti on introducing this bill. This is a very very good bill. It is seeking to ensure that we apportion responsibility where it best rests. This Government has done a lot of work around the responsibility of lenders to ensure that people who take out loans are well-informed and that those processes are very transparent in order to seek to tackle predatory lending conditions and predatory lenders. Similarly we are of the view that manufacturers and sellers are where the responsibility lies under the Consumer Guarantees Act—or where it should lie—for the fitness for purpose of the goods sold and in fact their durability. This is the part of the Consumer Guarantees Act that most consumers understand the most—that when they purchase a good it should do what it is supposed to do and it should last for a reasonable period of time. At the moment under the Consumer Guarantees Act it is possible that lenders who have no part in the specifications of the good or in the selling of the good can be held responsible for those elements of the Consumer Guarantees Act and our argument is that they really should not be. Members opposite have asked for examples of this and I will give what I hope is a nice simple one. Let us take the purchase of a motor vehicle. If I go to purchase a car from a local car dealer and I go along to the bank—and my bank is the Bank of New Zealand—and I take out a personal loan for a sum of money that allows me to purchase that car there is not a person in New Zealand who would hold that the BNZ has any responsibility for the quality of the car or for its durability and whether it lasts 1 year or 10 years. No one in New Zealand I would suggest—no one in the public—would think that the bank in that situation should have any liability if the car in fact turns out to be a bit of a lemon and falls over after a couple of months. You can take other situations where the dealer has some level of involvement but one might then still question whether the lender in those conditions should have some liability. For instance if I go to the bank and get the money myself no one would see a link. But if I went to the car dealership and the dealership said Well I can arrange this loan for you with your bank the BNZ." all it is doing is relieving me of a bit of administrative burden. In that case I would argue that most people would say that actually the bank still has no part in the decision quality or specifications of the vehicle because the loan processing in the application is being processed by another person to assist me. Then you get into situations where it is not say a major trading bank but it could be a finance company not connected as such to the dealership but specialising in motor vehicle finance and you could take the situation there. So there is no ownership relationship between it and the car dealer but because it specialises in vehicle finance it is a natural avenue for that dealer to help assist a consumer or a purchaser wanting to buy a car to get the loan to complete that transaction. I look forward actually to debating in the select committee whether the financier in that position should have some liability. I would suggest the answer is still no. But to use a potential real-world scenario where we would hold—even under the changes that are proposed in this bill—that the lender could and perhaps should have responsibility take where you have a motor vehicle group say that may have multiple franchises and it runs its own lending organisation. In that case the dealership and the dealer are using their group of companies' finance company to provide the loan so that a person can purchase a car from another member of that group. In that situation I think it is very very plausible that the public at large—and the purchaser of the vehicle indeed—would also say that actually the lender in this situation is very much a party to the entire purchase and is not simply extending a line of credit so that one can walk into a dealership and buy a car. I am sure that is an example that will be traversed in the select committee which is where this very very good bill belongs. Because I sit on the Commerce Committee I look forward to scrutinising the bill and hearing submissions. At this stage I would commend this bill to the House."