Tisch Lindsay: Credit Contracts and Consumer Finance Bill — In Committee 
Tisch Lindsay: Credit Contracts and Consumer Finance Bill — In Committee 
[Volume:611;Page:8713] 
LINDSAY TISCH (NZ National—Piako) 
: 
 I want to pick up a very important point that my colleagues Sandra Goudie Brian Connell and Tony Ryall have brought to the Committee’s attention and that relates to clause 9. It is in clause 9 that we look at the meaning of “consumer credit contract”. The issue was very evident in the speeches of Tony Ryall who has an understanding of financial matters and of Brian Connell who in his work in the finance sector has for many years worked with credit contracts variations of contracts and other contracts of various sorts. 
I was not happy with the Minister’s response and I ask that she take a call on this very important part about the broker’s commission. The point I make is that when borrowing money the borrower wants to know what it actually costs. When a person is borrowing X dollars there could be insurance charges associated with that and establishment costs to set the loan up. Those costs are acceptable and are happening all the time but if a borrower is dealing with a broker there is also a broker’s charge associated with that. That is what we are talking about—the total cost. 
In the days when I worked for the Rural Bank we had to look very closely at the contracts. At that stage back in the 1980s we were lending concessional money because the bank was a Government-owned agency at that time but the bank moved into a commercial environment when the Rural Bank was sold and the National Bank took it over. I was there when we moved from concessional interest rates through to market rates. Interest rates shot up very quickly and there had to be disclosure. That is the point I am making and the Minister has an opportunity to comment. If I am in a position where a broker is involved why is the broker’s commission not included in the meaning of “consumer credit contract”? Why has it been discarded? 
This bill is about protecting people who want to borrow and that is fair enough. The question earlier on—and Stephen Franks made this point—asked what was new about this bill that was not in the current Act? Because if one has been dealing with credit contracts over a number of years one would realise that the bill we are dealing with here does not substantially change things. In fact if we look at some of the submissions that came in it does not substantially change what was wrong with the Act under which we now work. So the question is: what is wrong with the existing Act? 
Sandra Goudie 
: There is no evidence that it is wrong. 
LINDSAY TISCH 
: There is no evidence in the submissions and I have read through them. What is actually wrong with the current Act? 
The point my colleague Sandra Goudie made which is very important when dealing with business was about the huge compliance costs that all businesses are having to deal with—“regulatory creep” I call it. Businesses will have to face huge compliance costs if we implement this bill in its current form. We are a party that is opposed to huge compliance costs and to regulatory creep. We want to limit those costs and that is why we will be voting against Part 2 of this bill. We do not agree with it. The concept of the bill overall is fine but Part 2 misses the point that we think is so important for people who are borrowing—the creditors the debtors lessees lessors and people involved in the finance industry. 
I will bring members back to the point and read out Clause 9(1)(c) because it is significant. It states: “A credit contract is a consumer credit contract if—(c) interest charges credit fees or both are or may be payable under the contract …”. It does not include brokerage and that is the point I keep making. If we are talking about the one-stop shop and about the total costs that will be involved for the borrower—and that is what I am interested in: what will it cost me to get into this contract?—then the clauseshould include the brokerage fees. Speakers on this side have clearly articulated that if we want to protect the interests of the borrower then we need full disclosure. That is why we are voting against Part 2.