Faafoi Kris: Credit Contracts and Financial Services Law Reform Bill — Second ReadingText is incorporated into the Bound VolumeFaafoi Kris: Credit Contracts and Financial Services Law Reform Bill — Second Reading[Sitting date: 10 April 2014. Volume:697;Page:17169. Text is incorporated into the Bound Volume.]KRIS FAAFOI (Labour—Mana):Thank you very much for the chance to speak in this second reading of the Credit Contracts and Financial Services Law Reform Bill. Like the Minister of Pacific Island Affairs Sam Lotu-Iiga I also represent a community that is disproportionately affected by the kind of behaviour that is carried on by third-tier lenders—or as we like to colloquially call them loan sharks—and the likes of as I guess they would call themselves mobile traders whom we like to call truck shops.It would not seem fair to any fair-minded New Zealander that interest rates of the likes of 50 percent to 100 percent or even more are charged to vulnerable people in our community. I think if you asked any fair-minded New Zealander who wants a fair go for consumers especially those who are vulnerable and who cannot get credit from the likes of traditional banks they would say that getting charged the likes of 50 to 100 percent is just not fair. It lands a whole lot of families—and as I say there are a whole lot of families in my community who sign up to those kinds of deals—in massive trouble. It usually ends up with them going to the likes of the local citizens advice bureau or the Porirua Budget Service. I am going to see the Agape Budgeting Service tomorrow in Porirua. Those are the kinds of people who end up dealing with the hurt of the families because the likes of third-tier lenders or loan sharks are able to charge exorbitant interest rates.Although we are supporting this piece of legislation this is a massive opportunity gone for this Government to take some real action to introduce interest rate caps. I do want to acknowledge my colleague Carol Beaumont who has a number of Supplementary Order Papers on this bill. One of those specifically does do what the Government should have done in the introduction of this bill and that is to look at interest rate caps. I think it was Mr Lotu-Iiga who said that these interest rate caps do not work. So maybe Mr Lotu-Iiga would like to ask the likes of many countries in Europe Mexico Canada South Africa Japan Singapore—which has a Government that this Government always says is doing a good job financially—the US Australia and most recently the United Kingdom as to why they think it is appropriate to put in interest rate caps for third-tier lenders. I think those Governments probably recognise the fact that there is huge public interest in making sure that the most vulnerable in our communities are not stung more by the likes of interest rates of 50 percent to 100 percent.Essentially what we are saying here is that this side of the House is not OK with the most vulnerable people in our community going to third-tier lenders and paying interest rates of 50 percent to 100 percent or more. But that side of the House—the Government; National United Future—are quite OK with people who probably cannot afford to take out these loans having these huge exorbitant interest rates. That is exactly what this boils down to. We are not OK with it but that Government is OK with it.From now on all the hurt that the likes of budgeting services see around the country can be blamed on that Government because it is quite OK with letting things go on as they are now.Or one person in this House the Hon Peter Dunne could change his mind again. He could change his mind again. Andrew Little said that Mr Dunne supported a member’s bill back in 2010 in the name of Carol Beaumont that would have introduced interest rate caps. I want to quote from the same letter that Mr Little—Dr Cam Calder: Williams.KRIS FAAFOI: —Mr Williams thank you—quoted from. I want to declare somewhat of a conflict of interest. This letter is to Mr Andrew Shann who is a constituent of mine and who also works for me part-time and who has been campaigning against third-tier lenders since well into the past and also to make sure that interest rate caps come in.Hon Simon Bridges: Ah!KRIS FAAFOI: You can crow over there because you guys are OK with 50 percent or 100 percent interest rates. You are OK with it. I am not OK with it. You guys are the ones who are OK with it. I just want to say that Mr Dunne was not OK with it 4 years ago. He said: “I was very pleased to hear from you … thank you for taking the time to write to me” He said he supported the bill and was very sorry that it did not pass the first reading.So 4 years ago Mr Dunne was not OK with exorbitant interest rates but now that he has got the Crown car back and he is back in his ministerial office he is toeing the party line and he is all of a sudden not OK with caps on interest rates. I would suggest—if people are watching this debate and I am sure a lot of people around the country who are interested in making sure that—Dr Cam Calder: If they know you’re speaking they will be—they will be.KRIS FAAFOI: He is a retiring member. Those people who are interested in making sure we are looking after vulnerable people can put a lot of pressure on Mr Dunne to change his mind again. His is the one vote that could change this whole thing. Peter Dunne said in 2010 that he was OK with interest rate caps but now that he is back in the House with the Government he is not OK with it.So write letters to Peter.Dunne@parliament.govt.nz. Send him a letter—to the Hon Peter Dunne. It is freepost. If you are not OK with 50 to 100 percent or more interest rates write Peter Dunne a letter send him an email or bombard his office with phone calls. He is the one who can change this whole situation. The Government has not shown any leadership on this. It is dead against interest rate caps. It does not want to introduce them. But there is one person in this House who can change everything. I fear that he may not change his mind because what did he do with asset sales? He made sure he voted for that. That squeaked through with one vote. But I do not want to discourage people from trying to get Peter Dunne to change his mind on this.Can I just take a brief moment because this was the first substantive piece of legislation that I sat through on the Commerce Committee to thank other members of the Commerce Committee. It was a relatively good process. We had the odd stoush—nothing compared with what we have had recently.Carol Beaumont: Officials.KRIS FAAFOI: Can I thank the officials too because as the chair of the select committee Jonathan Young said the bill is very technical but I think the way the officials guided us through this process made it very plain sailing for someone who had to make sense of this as a new member to the select committee.I do represent a community where the effects of loan sharks and truck shops do have a disproportionate effect. Although I support this piece of legislation I do think as I have said before that we have missed an opportunity to make the lives of those people better. I have had people in my office who have been in tears because of the interest rates and the debt that they have got themselves into with loan sharks. I cannot do much more than offer the services of a budgetary advice service. That is heartbreaking because I think this Parliament should be able to do something to prevent people from getting into those situations. I think an interest rate cap certainly would have been one of those ways.There is also one person I do want to thank who is not in this House any more and that is Charles Chauvel. Before he left this House he also took a very strong leadership role in the Ōhariu electorate which Mr Dunne is the MP for in making sure that this issue was brought to the fore. It was actually 5 years ago when the effects of the global financial crisis started kicking in that this really started to hit home especially with our most vulnerable people in our communities.As Sam Lotu-Iiga said he put in a member’s bill 3 years ago—3 years ago. It was 3 years ago and we are sitting here today 6 months before an election and something is being done about it only now. My question is why it has taken so long for this Government to get off its chuff and make sure that something is done for these most vulnerable people. We have still got the Committee stage of this debate to go and I suggest that that question may be a very strong theme in that debate—as to why it took so long for this Government to do something. During that time a lot of families up and down this country and certainly in my electorate of Mana have been put through harm that I do not think they necessarily should have been put through. They are in debt. That affects their daily lives. It affects what they can do with their kids and their families. If this Government had acted a little bit sooner to put some protections in place for them their lives could have been markedly different.I just want to finish up with this thing. There is one vote in this House that can change it. We on this side of the House are not OK with interest rates of 50 to 100 percent or more. If this Government does not support the Supplementary Order Paper of Carol Beaumont that pretty much says that that Government is OK with it.Bill read a second time.