CCCFA amendments delayed
On Thursday 9 September 2021, the Ministry of Business, Innovation and Employment (MBIE) announced a number of changes to legislation due to the shift in COVID-19 alert levels. These changes are:
- delaying the upcoming amendments to the Credit Contracts and Consumer Finance Act 2003 (CCCFA);
- re-activating amendments to the Contract and Commercial Law Act 2017 for electronic execution of powers of attorney; and
- re-instating the compliance relief contained in the COVID-19 Response (Requirements For Entities—Modifications and Exemptions) Act 2020.
Upcoming changes to the CCCFA
As all consumer lenders are aware, the CCCFA and Credit Contracts and Consumer Finance Regulations 2004 (Regulations) were to be amended on 1 October 2021.
Due to the recent COVID-19 alert level shift across New Zealand, MBIE announced a number of the CCCFA and Regulations amendments are to be delayed and are now to come into force on 1 December 2021, including the revised responsible lending code (except for chapter 12, which is still coming into force on 1 February 2022).
This affects the following amendments to the CCCFA and Regulations:
- Disclosure about debt collection;
- The new director and senior manager due diligence obligation;
- Suitability and affordability regulations; and
- The duty to provide an annual return.
This time delay does not include the fit and proper certification requirements for lenders (except for those exempt from certification). To see a full timeline of the upcoming changes, please see the revised timeline on the Commerce Commission's website here.
The Government considers the delay is necessary due to the impact on lenders’ implementation of the upcoming amendments, which has disrupted training and other preparations and forced a reprioritisation of lenders’ resources to support existing customers.
The Government and MBIE appear to be taking a customer centric focus with the delay, and we expect it will be a welcome relief for all lenders as they finalise their systems.
MBIE has announced that the shift in Covid-19 alert levels has further instigated the following legislation changes which we are familiar with from previous alert level shifts:
- Re-activating amendments made to the Contract and Commercial Law Act 2017 to facilitate electronic execution of security documents containing powers of attorney (subject to Parliament passing the necessary legislation).
- Reinstating the compliance relief contained in the COVID-19 Response (Requirements For Entities—Modifications and Exemptions) Act 2020 (subject to Parliament passing the necessary legislation). This enables organisations to:
- hold meetings, sign instruments and vote on certain matters electronically – even if the organisations constitution does not allow for this; and
- more easily modify certain requirements or restrictions in the organisation’s constitution or rules, such as – deferring reporting or waiving member’s fees.
Please refer to our other recent publications on the upcoming amendments to the CCCFA.