Ethical lender says CCCFA changes deal with the elephant but ignore the real killers

April 22, 2024

Elephants, the Internet reckons, kill around 500 people in Africa each year.

Mosquitoes kill a million.

Upcoming changes to the Credit Contracts and Consumer Finance Act focus on the mortgage elephant, while ignoring the real killers, says Sasha Lockley, cofounder and CEO of ethical lender Money Sweetspot.

“We deal with Kiwi families who are struggling with debt. It’s not mortgage debt that’s the problem… it’s the small stuff. High-cost lenders, credit cards, buy now pay later, personal loans, store credit… it’s those “easy monthly payments” that Kiwi are struggling to swat away.

Sasha agrees with Banking Association CEO Roger Beaumont that the eased rules are unlikely to lead to people getting mortgages they can’t afford. It’s the even easier access to smaller loans that concerns her:

“As a relatively new lender we know all too well the high costs to compliance with the existing regime. Reducing the scrutiny may well reduce compliance costs and increase competition and choices for Kiwi but it may also create the perfect environment for the mosquitoes to bite.”

It comes at a time when financial mentoring services, who are already feeling the pressure of an increase in demand for their services, are still awaiting the outcome of their funding from Ministry of Social Development.

“If only we invested as much in filling the gap in financial literacy and support in New Zealand, rather than making it easier for people to become over indebted.”

Explore the movement towards healthier financial practices with us.

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