Catchpole Brent: Credit Contracts and Consumer Finance Bill — In Committee 
Catchpole Brent: Credit Contracts and Consumer Finance Bill — In Committee 
[Volume:611;Page:8719] 
BRENT CATCHPOLE (NZ First) 
: 
 Part 3 is the real guts of the bill where the Government had to act swiftly because of the buy-back schemes. Those schemes came about in fairly recent times and they hit with a vengeance. I am pleased to observe tonight that a large number of members both in the Opposition and in the Government are supporting this part. It is a very important part intended to protect the unwary from the extraordinary lengths to which some people will go to in order to trap them into a situation that they will have no way of getting out of. That is basically what the buy-back transactions of land are all about. They are set up in such a way that the individual who borrows the money against his or her property has no way of refinancing it and getting the property back. 
Hon Lianne Dalziel 
: They have transferred their property. 
BRENT CATCHPOLE 
: The person has transferred his or her property and basically the conditions are set so that it makes it very very difficult for the person to get it back. 
I would like to touch on the point concerning independent legal advice. We agonised for quite some time in the Commerce Committee over how we could ensure that a person who was trying to borrow money would get independent legal advice. In many cases a person has turned up with perhaps a parent or a friend who has tried to assist the borrower and in those cases neither person has had financial or legal knowledge. We have put in a clause requiring that there must be legal advice. Sometimes the person lending the money recommends the legal advice and that is an area where a person can fall into a trap. If the borrower accepts that advice then he or she is in dire straits. We agonised over that provision to try to make sure that that situation did not happen. I certainly hope it does not happen under the circumstances provided for in the bill because it is a very serious issue. 
With that I say New Zealand First strongly supports this part of the bill. We support the bulk of the bill but this is a very important part that needs to be acted on quickly because of the circumstances that have developed very recently and very swiftly. Unfortunately I do not see any remedies in this bill that will solve the existing problems that people may have. Although the Minister has stopped any further transactions like that I believe that this legislation will not resolve the situation for those who have already lost their homes or are already tied up in an existing agreement under the previous Acts. Unfortunately I feel that this legislation does not quite capture those people. I would like to get an assurance from the Minister that it does but I have a feeling that this part is weak and does not quite resolve that problem. 
Another issue is the cost of getting legal advice. The cost of approaching a lawyer adds to the cost of the money that a person has to borrow. That is where independent legal advice will sometimes fall down and the person will try to rely on a relation who has some legal knowledge. But occasionally that will fall down too. 
Deborah Coddington raised an interesting point about the hardship provisions. According to the way that a buy-back scheme is set up if a hardship provision is invoked under the bulk of this legislation then there will be some serious difficulties for the people who have lent the money.