Briefs: NZ ministry opposed comprehensive licensing

Banking Day staff Briefs
  • A regulatory assessment from the New Zealand Ministry of Business, Innovation and Employment (MBIE) reveals the ministry strongly opposed the introduction of a comprehensive creditor licensing regime, similar to that operating in Australia, as part of the government’s crackdown on payday lenders and loan sharks. An MBIE spokesperson told that it believed the compliance costs would be too much of a burden on lenders (including those “currently acting responsibly”) and may also stifle competition by discouraging new entrants – leading to even higher borrowing costs for consumers. It assessed that such a regime would be “worse than the status quo”. The government is instead proposing to introduce a “fit and proper person” test for lenders.