Government issues Responsible Lending Code

Commerce and Consumer Affairs Minister Paul Goldsmith today announced the release of the Responsible Lending Code.

“We know that most lenders are already following responsible lending practises with their customers. However, a percentage of lenders – such as loan sharks and unscrupulous payday lenders – are not,” Mr Goldsmith says.

“The Responsible Lending Code provides guidance on the new lender responsibility principles set out in the Credit Contracts and Consumer Finance Act. Last year the Government amended the Act to provide greater protection for consumers when they borrow money.

“The Code and lender responsibility principles come into force on 6 June 2015. They will allow borrowers to have better access to information, and better protection from those lenders who engage in predatory practices. At the same time, they will keep down compliance costs for those lenders who already have good, responsible systems in place.

The Code will not be binding, but evidence of compliance with the Code will be viewed as evidence of compliance with the binding lender responsibility principles set out in the Credit Contracts and Consumer Finance Amendment Act.

“I would like to thank the lenders, consumer groups and other interested parties who have taken the time to give us constructive feedback on the Code, and assisted in its development.

“With their input, officials have been able to develop a document that provides good principles-based guidance for lenders, while maintaining robust protections for consumers.

“I will be closely monitoring the effects of the Code and how well it is achieving its consumer protection objectives,” says Mr Goldsmith.