Ryall Tony: Credit Contracts and Consumer Finance Bill — In Committee 
Ryall Tony: Credit Contracts and Consumer Finance Bill — In Committee 
[Volume:611;Page:8691] 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: 
 This is the Committee stage of the Consumer Credit Bill which has found itself morphed into the Credit Contracts and Consumer Finance Bill. We will refer to it as the “TripleCFB” during our debates. I have a team of experienced members of Parliament who will debate this bill. We are seriously concerned about a number of factors and we will spend quite a considerable amount of time on the debate. I have at least five members on my team and they will each want to take a couple of calls on the quite important matters here. 
During this debate we will focus on the compliance costs associated with the bill. We will also talk about and attack the new hardship provisions because we believe that they will add to the cost of consumer credit in New Zealand. We have discussed this issue with a number of financial institutions and it is quite clear that the cost of credit will go up. What is worse the cost of credit for people who can least afford it will increase. 
We have also discovered a major loophole in the bill which will see a significant credit cost to a lot of borrowers omitted from the disclosure regime. We will discuss that later in the bill. We signal to the Minister that she will want to discuss the loophole with her officials because it completely undermines this bill. If the bill is all about making sure that borrowers know the full cost of what they are undertaking the loophole that we have discovered could have a very serious implication for that purpose and we know that that Minister will want to make changes to the bill. 
We have proposed a number of changes to the title of the “TripleCFB” because we do not believe that it correctly identifies what is being proposed. This bill should be called “An Additional Compliance Bill” because it will put a huge compliance cost on those involved in the financial service industry which will be passed on immediately to the consumers of credit. 
I give the Committee just a couple of examples of additional compliance costs. New credit documents will be required to be drafted by all financial institutions and the institutions will have to revamp their compliance regime in respect of consumer credit matters. It is very worrying that there will have to be quite a new set of procedures and practices in relation to the setting of fees because this bill provides for a legal challenge to fees provided by institutions. It also provides for a legal challenge to the terms and conditions of loans advanced by institutions. 
Jill Pettis 
: What about the title? 
Hon TONY RYALL 
: We have had a little chirp from the cheap seats asking about the title. If that member would listen to a debate for a change instead of looking at her papers and piping up from time to time with those irrelevancies for which she is known she would realise that we have put forward amendments because this title reflects additional compliance. I am trying to explain that to her. Obviously I need to do it in monosyllabic terms to try to tell her about the difficulties—four syllables—associated with this bill. One of them is that there will be an additional compliance cost associated with the fact that borrowers will be able to go to court and for something called “reasonable cause” or “sufficient reason” request that the terms and conditions of their loans be set aside by the court. That is a very serious implication because a lot of those finance institutions factor their books— 
The CHAIRPERSON (Hon Clem Simich) 
: Could the member please come back to the title? 
Hon TONY RYALL 
: The point is that the Committee should look at my amendments. It is clear that in the amendments we are talking about additional compliance and disclosure of regulations. I have moved those amendments I am allowed to talk to them and I say that the additional cost associated with a bill that will undermine certainty about the value of debt needs to be reflected in the title of the bill. I have two amendments. One refers to “additional compliance” being added to the title because that is being proposed— 
Mark Peck 
: No submissions. 
Hon TONY RYALL 
: The member says there were no submissions about additional compliance. Well members should look at the submissions made by the Financial Services Federation and the Bankers Association.