Those affected are likely to include persons or companies who
provide vendor financing as part of their main business.
Wider definition of "credit contract"
The Bill expands the definition of "credit contract"
by removing an exemption in the Financial Service Providers
(Registration and Dispute Resolution) Act 2008 (FSPA) for
contracts which are leases of goods under a financing
The change is aimed at "loan sharks" who finance
purchases of consumer goods such as furniture or appliances and who
- due to their unregistered status - "are likely to be less
scrupulous in their dealings with borrowers, and less concerned
about complying with other laws such as the Credit Contracts and
Consumer Finance Act (CCCFA)".1
But it will also catch other reputable persons or companies who
provide vendor financing arrangements as a part of their main
business, who may have previously been excluded from the
requirement to register under the FSPA and to join a dispute
The Bill also enables the Financial Markets Authority
(FMARegistrar) to decline a registration or to de-register
a provider where the FMA is not satisfied that the purposes of the
FSPA are met.
extends the Registrar's powers of inspection to seek any
information necessary to determine whether a financial service
provider should be registered, including whether an application
should be referred to the FMA, and
disqualifies from registration anyone with overseas criminal
convictions within the last five years for theft, fraud or money
laundering (persons convicted within New Zealand are already
"Responsible lending" principles
The Bill significantly reinforces the protection already
afforded to consumers under the CCCFA, through introducing a
"Code of Responsible Lending" (Code).
While the Code itself is not legally binding, compliance by
lenders will be taken as evidence that no oppressive conduct
(allowing re-opening of the contract under the CCCFA) has occurred.
The Bill also contains a suite of other amendments strengthening
consumer rights – we will deal with these in more detail in a
separate Brief Counsel.
If you think you may come within the new definition of credit
contracts, and you are not registered under the FSPA, please
contact us for more information or advice.
There will be an opportunity to submit on the Bill in the select
committee stages. We will keep you informed of developments.
Our thanks to Sarah Watson for writing this Brief
The committee set up to draft a Code on Resolution of Financial Firms, by the Ministry of Finance, Government of India, on September 28, 2016, released a draft bill – The Financial Resolution and Deposit Insurance Bill, 2016...
In a race to adopt technology innovations, Banks have increased their exposure to cyber incidents/ attacks thereby underlining the urgent need to put in place a robust cyber security and resilience framework.
RG 256 deals primarily with remediation programs conducted by licensees who provide personal advice to retail clients.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).