Overdue restrictions on loan sharks

Loan sharks ripping off vulnerable people, creating hopeless debt traps, are finally being regulated. This has been a problem for years.


Government crackdown on loan sharks

  • Cap on total interest and fees charged
  • Stiff penalties for loan sharks who break rules
  • ‘Fit and proper person’ test for lenders, door-to-door salespeople and truck shops

The Government is introducing tough new measures to protect people from loan sharks and truck shops, Prime Minister Jacinda Ardern and Commerce and Consumer Affairs Minister Kris Faafoi announced today.

“This Government is committed to making New Zealand the best place to raise a child,” Jacinda Ardern said. “To do that we must stop families becoming trapped in the appalling debt spirals and poverty that result from onerous lending and payback terms.

“These new measures will halt the very worst of those preying on vulnerable and desperate people while enabling borrowing that meets their needs in an affordable way.

“They will protect families through capping the total interest and fees charged loans, introducing tougher penalties for irresponsible lending, and raising the bar for consumer lenders to register as a Financial Service Provider,” Jacinda Ardern said.

The announcement was made at the Vaiola Pl Budgeting Service in Mangere, where the Prime Minister and Minister Faafoi met with people affected by predatory lending as well as budget and financial advice providers.

“The 2015 amendments to the Credit Contracts and Consumer Finance Act (CCCFA) did not go far enough in protecting our most vulnerable consumers from loan sharks,” Kris Faafoi said.

“The introduction of an interest and fees cap on high-cost loans will prevent people from accumulating large debt from a single small loan. For example, if you borrow $500 you will never have to pay back more than $1,000 in total, including all fees and interest.

“The changes also lift the level of professionalism across the industry, by requiring directors and chief executives of lenders offering consumer credit contracts to pass a ‘fit and proper person’ test in order to register as a Financial Service Provider.

“Any lenders breaching the responsible lender principles will face stiff new penalties of fines up to $600,000 under the strengthened enforcement provisions in the CCCFA.

“We listened to consumer advocates and the finance sector’s feedback and will also be seeking increased resources for enforcement and monitoring to ensure lenders who break the law are detected and stopped,” Kris Faafoi said.

The Government is also tackling predatory behaviour by truck shops and others who sell door-to-door on credit or other deferred payment, by requiring all mobile traders to pass the ‘fit and proper person’ test.

The law will also be strengthened to give consumers clearer powers when asking uninvited salespeople to leave their premises, including by strengthening the legal status of ‘do not knock’ stickers, he said.

The new measures will come into effect from 2020, subject to Parliamentary timeframes.

More information on the Review of the CCCFA is available here.


People should be responsible to an extent to their own financial predicaments, especially when they borrow money they can’t afford to pay back, to but exorbitantly priced convenience goods.

But businesses that loan money also have a responsibility to not be predatory, to not engage in impossible to service financial agreements.

‘But the changes won’t take effect until 2020’ is questionable – another urgent problem with a delayed response. Does it really need to take that long to sort out a shitty situation?

Meka Whaitiri dropped as Minister, remains an MP

It’s been a busy day in politics.

The Prime Minister Jacinda Ardern announced today  that following an inquiry into allegations she assaulted a staff member Meka Whaitiri has lost her ministries.

Meka Whaitiri will be removed as a Minister with immediate effect Prime Minister Jacinda Ardern said today.

The decision was made after receiving a report into an incident that occurred on 27 August in Gisborne, involving Meka Whaitiri and one of her staff.

“While the facts are in dispute, the report says an incident occurred. Meka Whaitiri continues to contest details of the incident, but there are elements which are agreed,” Jacinda Ardern said.

“For privacy reasons I don’t wish to divulge further details of the investigators report as it is an employment matter and protecting the privacy of the staff member involved is paramount to me.

“Based on the context and conclusions of the report, I no longer have confidence in Meka Whaitiri as a Minister at this time, and that is why I have taken the action I have.” Jacinda Ardern said.

Meka Whaitiri was stood aside from her portfolios on 30 August while the investigation was undertaken.

Kris Faafoi will retain the role of Minister of Customs and Meka Whaitiri’s Associate Minister responsibilities will sit with the lead portfolio ministers. There are no plans to undertake a Cabinet reshuffle.

With Curran already out that leaves a lean female line up for Labour.

Faafoi also picked up some of Curran’s workload so is going to be a very busy minister, but still outside Cabinet.

Nation: trying to clamp down on loan sharks

An overdue attempt to clamp down on loan sharks is covered in Newshub nation this morning.

Consumer Affairs Minister Kris Faafoi live in studio: Says there were 103,000 potentially dangerous Takata airbags in circulation, says around 53,000 are still outstanding.

They talked to him about loan sharks after that.

Ironically I just checked the spam bin and the only one there is for online loans.

Nothing much on what he said though – and i was multitasking and not really listening so can’t help there.

A lot more on it elsewhere:

From Kris Faafoi:


Credit review and measures to stop predatory lending released for discussion.

Minister of Commerce and Consumer Affairs Hon Kris Faafoi today released the discussion paper outlining findings from the review of the Credit Contracts and Consumer Finance Act.

Possible measures identified in the paper to protect consumers include caps on interest rates and fees, increased licensing or registration for lenders, strengthening enforcement and penalties for irresponsible lending and introducing more prescriptive requirements for affordability assessments and advertising.

Continued predatory behaviour by mobile traders is also considered, as is extension of the Act to cover credit not currently covered including after pay options.

Mr Faafoi says that the findings of the review confirmed what he has been hearing from budget services and vulnerable consumers across New Zealand.

“Clearly the 2015 amendments to the Act did not go far enough and it is time now to finish the job and protect the most vulnerable consumers.

“I’ve spoken with people who have been given loans that are clearly unaffordable for them, and others who have been lashed with huge penalties and fees. These practices trap people and whanau in an appalling debt spiral that is very difficult to get out of.

“While agencies including our hosts today (Salvation Army and Newtown Ethical lending) are doing what they can to help people, we need to ensure the regulatory settings are right to stop the practices that get people into these terrible situations.

“As a Government we are tackling many of the issues that lead to financial stress, and by 2020 the Families package will see 385,000 families with children made better off by an average of $75 a week when the Package is fully implemented.

“Also getting the credit settings are right, so that people can borrow appropriately when they need to but are not dragged into a long-term debt spiral is another way we will ensure all New Zealanders benefit from a strong and inclusive economy.”

The review of consumer credit regulation discussion paper is available here. Submissions close on 1 August.

Leggett legging it to National?

It is being rumoured that Nick Leggett may stand for National in next year’s election, having left Labour and having had a boot up the bum from Andrew Little.

When he was Porirua mayor Nick Leggett was touted as a future Labour Party leader. But he had to leave Labour to stand for the Wellington mayoralty, and was blasted by Andrew little as ‘right wing’.

In August in Labour MPs forbidden from associating with “right-wing” Wellington mayoral candidate:

And he’s making it clear he considers Nick Leggett, a former Labour Party member, a right-winger.

“His campaign manager is well-known ACT party identity. We know that there’s money from the right-wing that has gone into his campaign. He’s a right-wing candidate.”

Wellington Mayoral candidate Nick Leggett appears to be public enemy number one for the Labour Party as its MPs are forbidden from associating with him.

Labour Leader Andrew Little has pulled rank, preventing MP Stuart Nash from speaking at an event where Mr Leggett was also speaking.

Mr Little said the event was for right-wingers who have routinely sought to undermine the Labour Party and it’s not right for a Labour MP to share a platform with people who do that.

In October Little seemed to have softened. From Another contender in fight for Mt Roskill:

Former Porirua mayor Nick Leggett would be welcome back into the Labour fold as someone with a “big future ahead of him”, Labour leader Andrew Little says.

“Nick is a talented guy…whether he just saw an opportunity for those who wanted to back him for mayor against a Labour candidate, who knows,” Little said, after Labour-endorsed Justin Lester was confirmed as mayor last night.

“He is a talented guy and he has got a big future ahead of him. But he has got to work with people who can organise for his success.”

On Tuesday Leggett indicated that those people wouldn’t be from Labour. Newstalk ZB: Nick Leggett: Labour has changed and I’m not going back

Nick Leggett told Tim Fookes he’s still interested in a career in politics, but it wouldn’t be with Labour as the party has changed.

“I want to live in a country that’s open, its borders are open, it’s open to migrants, it’s open to trade.”

“Unfortunately Labour seems to be going in the opposite direction to that, and I think it’s very sad.”

This morning from Newshub: From Labour to National, is Nick Leggett jumping ship?

Rumours are circulating that former Porirua mayor and ex-Labour stalwart Nick Leggett could be standing in the Mana electorate at next year’s election for the National Party.

It’s up for grabs following Hekia Parata’s decision to leave politics however Mr Leggett says nothing is official – yet.

“I would never say never but I say that in the widest possible sense,” he said.

“I won’t rule out standing for any, I think that would be silly to.”

Labour’s Kris Faafoi (19,651) easily beat Hekia Parata (11,698) in Mana in 2014 but National was ahead by over 2,000 votes in the party vote. Parata won’t be standing again next year.

Chinese ski agreement good for Central Otago

On his trip to China Minister of Tourism John Key has witnessed the signing of a ‘memorandum of understanding’ between the Chinese Ski Association and the Winter Games NZ Trust that could bring big benefits to Central Otago skiing and tourism in general.

ODT reports: China partnership ‘momentous step’

A ground-breaking agreement between the Winter Games NZ Trust and the Chinese Ski Association could be worth millions of dollars to the Central Otago economy.

Real Journeys chief executive Richard Lauder said a memorandum of understanding between the association and the Winter Games NZ Trust, signed in China on Tuesday night and witnessed by Prime Minister John Key, was ‘‘pretty important” in the promotion and development of New Zealand as a skiing destination for the Chinese.

The company bought Cardrona Alpine Resort in late 2013 and over the past two years had been working to attract the Chinese market.

The resort had an agreement with the Wanlong Ski Resort, near Beijing, on employing and training ski instructors.

The Chinese national freestyle team also used Cardrona as a training base during its off-season.

Winter Games NZ Trust chief executive Arthur Klap described the deal as a ‘‘momentous step” for snowsports in New Zealand.

Under the agreement, the association will use New Zealand as its training base and the Winter Games as its competition base during northern hemisphere summers from 2017 to 2021, in preparation for the Winter Olympics being held in Beijing in 2022.

Lake Wanaka Tourism business development executive Geoff Mark said the MoU would reinforce the interest in New Zealand ‘‘as a whole” and would help develop the emerging Chinese ski market, which had begun to grow over the past couple of years.

‘‘If people in China are looking at skiing overseas, they will choose New Zealand.

‘‘The spin-offs for [Queenstown Lakes] in particular will be major and worth millions of dollars to the region.”

Sport New Zealand chief executive Peter Miskimmin said WGNZ was established as ‘‘a key event on the global snow sports calendar”.

‘‘This partnership will deliver real benefits for both countries.”

Tourism in general and especially Chinese tourism is booming, and is one of New Zealand’s biggest economic successes.

It’s not something the Minister of Tourism gets much public credit for. Key is criticised for swanning along and not doing much of importance.

Stuff reported in December: International tourism overtakes dairy to regain top spot as our biggest export earner

Tourism’s $13.5 billion in export earnings has put it ahead of the dairy industry for the first time in five years as the visitor boom continues.

The Tourism Industry Association (TIA) said the figure, drawn from Statistics New Zealand data, was based on the estimated spend by all international visitors, plus airfares. It excluded international students studying here for more than 12 months.

Annual dairy exports totalled $13 billion for the year ended September 2015.

TIA chief executive Chris Roberts said tourism and dairying were both vital to the New Zealand economy, and the recent dramatic growth in international visitor spending highlighted tourism’s important role.

Andrew Little has just appointed Labour’s new shadow cabinet spokesperson Kris Faafoi as Spokesperson for Tourism.

Meanwhile Stuff reports today: Tourism from China will likely outstrip infrastructure, says John Key

Prime Minister John Key is betting his “bottom dollar” that Chinese tourism to New Zealand will reach one million a year, but it is unlikely there is the infrastructure to the numbers.

The “good new part of the story” was tourism had picked up the slack, whereas other parts of the economy had been “a bit softer”, said Key.

“If you think about things like Chinese new year, they’d been a massive boon and extension of the general peak period. There’s no question that we actually do need to build more infrastructure.

“So the air connectivity part of the equation was lifted dramatically, and we’ve seen lots of new carriers return to New Zealand. The point about the infrastructure at the peak is right, we need to build more of that.”

 

Faafoi rises in Labour reshuffle

Andrew little has promoted Mana electorate MP Kris Faafoi in his caucus reshuffle after Clayton Cosgrove announced he would not stand again next year.

Kris Faafoi promoted to Shadow Cabinet

Posted by Andrew Little

Kris Faafoi has been promoted to Labour’s Shadow Cabinet and receives the Tourism portfolio while Clayton Cosgrove takes on a business outreach role – a move prompted by Mr Cosgrove’s decision to not stand at the next election, says Opposition Leader Andrew Little.

“Kris Faafoi is a very talented MP whose hard work has earned him a place on the Shadow Cabinet. He is instantly recognisable to many New Zealanders and connects well when he’s on the road – an invaluable skill when working with the tourism industry.

“David Shearer receives Kris’ Consumer Affairs portfolio. David is passionate about this area and has some special projects he is keen to work on.

“Clayton Cosgrove keeps his Commerce, Veterans’ Affairs and Associate Finance portfolios. He takes on a new business outreach role. Clayton has excellent links with business and will lead the push in working with industry. He has stepped out of the Shadow Cabinet to allow new talent to be promoted.

So Cosgrove has stepped down but not out.

 “Labour has a talented line-up with an excellent mix of wise heads and new blood. These minor changes provide new strength,” says Andrew Little.

I guess he has to say that.

While Labour’s ‘Team’ web page has been updated to reflect the new responsibilities the pecking order hasn’t changed, with Cosgrove still at number 18 and Faafoi still at 24.

This reshuffle not only hasn’t warranted a post at The Standard, so far Faafoi’s promotion hasn’t been mentioned in comments either. According to their Search he barely rates a mention ever (twice only so far this year) so the lack of interest is not surprising.

Faafoi was chosen to stand for Labour in the Mana by-election in 2010. He is the the first MP of Tokelauan descent (he grew up in Christchurch).

Faafoi trained as a journalist and worked for the BBC and as a political commentator.

He returned to New Zealand  and was Phil Goff’s chief press secretary when Goff took over Labour’s leadership after Helen Clark resigned. Faafoi was also the Rongotai Pacific branch chair of the Labour Party – that is Annette King’s electorate.

So Faafoi is one of the growing number of MPs who have effectively been internally promoted from within Labour’s political class.

An uncomplimentary cartoon by Emmerson at NZ Herald:

Where are the journalists going?

There are continuing concerns about journalists being gradually culled from major media organisations. NZ herald is one of the latest to show some the door.

This exchange on Twitter commented on some of that and asked lamented the thinning ranks of journalists.

Deeply concerned about right tilt in media. Now Campbell, Rudman, Drinnan gone and Weldon running Mediaworks.

Campbell has gone to a better place and… my god you’re not suggesting Drinnan is a leftie?!

@DavidCunliffeMP

He is at least an independent and critical voice re media – how thin the critical media voices now are!

To an extent that is a concern, but a signs of rapidly changing times. However there was an interesting response.

Well, you should stop bloody poaching them. Ihaka, Faafoi, Moroney ..

Sarah Stuart, Phil Twyford, Danya Levy and a little bit of David Cohen….. you have quite the Press Room.

He was making the point that political parties poach quite a few journalists.This not only reduces media experience but it pits poached experience against the reporters.

Going through those names – these three are MPs:

Kris Faafoi:

Kris lives in Titahi Bay, Porirua and was elected as the Member of Parliament for Mana in November 2010 following more than a decade working as a journalist at both TVNZ and the BBC – giving him a strong commitment to public service broadcasting. – Labour website.

Sue Moroney:

Has been an MP since 2005. Sue is a mum, a former journalist and a proud Hamiltonian and so she is a champion for early intervention and strong regional development plans. – Labour website.

Phil Twyford:

New voices: Sam Lotu-Iiga, Phil Twyford and David Garrett

MP for Te Atatu. Formerly a journalist at the now defunct Auckland Star and Sunday Star, and a union organiser, before starting his career at Oxfam as its NZ division’s founding CEO.

And ex-journalists in the Labour staff:

Jodi Ihaka:

Ihaka takes up Senior Communications Advisor role

Putting Māori Members of Parliament (MPs) at the forefront of important New Zealand politics is Jodi Ihaka’s plan, as she was recently appointed the Labour Party’s new Senior Communications Advisor (Māori).

“I’m really excited to use my communication skills in such an important Māori advisory capacity.  I have loved my time at Whakaata Māori (Māori Television) and have nothing but respect for the Māori journalists on Te Kāea and Native Affairs,” says Ihaka.

The position sees Ihaka take on a key advisory role to Labour leader, Andrew Little as well as Māori MPs including Kelvin Davis, Peeni Henare, Louisa Wall, Meka Whaitiri, Nanaia Mahuta and Adrian Rurawhe.

Sarah Stuart:

Former Woman’s Weekly editor is Labour’s new chief spin doctor

Labour leader Andrew Little has appointed a former editor of the Woman’s Weekly Sarah Stuart as his chief press secretary and head of media and communications.

Stuart, whose other former roles include deputy editor of the Herald On Sunday and the Sunday Star Times and head of APN’s regional and daily community newspapers, has also worked in Sydney as a journalist.

Danya Levy:

Former political journo turned Labour Party press secretary. @danyalevy  (ex Dominion Post)

David Cohen is a freelance journalist who has done some work for Labour and Andrew Little:

Little under fire for unpaid workerFreelance journalist David Cohen was called into work on Mr Little’s campaign for the Labour leadership in October. His role was to distil Mr Little’s ideas

He did the job, sent an invoice, but nothing. So Mr Cohen complained in print in the latest National Business Review.

And David Cunliffe should know a bit about the journalist drift into politics.

Cunliffe appoints Cunliffe as chief press secretary

Labour leader David Cunliffe has appointed journalist Simon Cunliffe as his chief press secretary and media director.

Simon Cunliffe has been a deputy editor of the Otago Daily Times and a deputy editor of The Press in Christchurch.

That’s just for Labour.

National MP Paul Goldsmith may not have been a journalist but was a press secretary for and speech writer for Phil Goff (Labour), Simon Upton (National) and John Banks (National).

Does anyone know of any other ex journos in Parliament as MPs or working for parties?

Labour MPs at Eden Park

It’s hard to believe that a minor story I first heard about last Sunday is still getting attention.

Just about everyone is rolling their eyes at MPs, especially senior MPs, leaving themselves open to almost inevtiable embarrassment.

I don’t think it’s a big deal but it was greedy and dumb.

And the way Labour has managed (or not managed ) the story through the week has been weak.

But I wonder what Sky City were up to. Surely they would have known the likely consequences – especially if they also invited people who were bound to notice and make a meal out of it (it’s turned out being a banquet).

Were Goff, King and Faafoi set up? They certainly took the bait and have been hooked, harpooned and lampooned. Silly buggers.

And who would know what Shearer was up to?

Kava concerns in Psychoactive Substances Bill

NZ Herald chose to highlight concerns over kava being covered by the Psychoactive Substances Bill when it was introduced to Parliament yesterday.  This was an odd thing to focus on, it was one relatively minor point made in the speeches.

Bill seen as threat to kava

Culturally important substances such as kava could be captured by a law change which aims to stamp out harmful synthetic drugs, MPs have told Parliament.

Labour MP for Mana Kris Faafoi said it was unclear whether the law would ban or limit the sale of kava crops, used in a traditional drink consumed at Pacific Island ceremonies and gatherings. Kava contained psychoactive substances and could have a sedative effect.

Mr Faafoi said: “There is a lot of cultural significance to kava and kava ceremonies … for the Tongan community, for the Samoan community, and for the Fijian community. It is a serious issue.”

From Faafoi’s speech in Parliament:

KRIS FAAFOI: There is nothing in this bill to say that kava may not be included, so I believe that that is one of the issues. And Sam Lotu-Iiga will be interested in this, because he is never shy of an ‘ava ceremony. So if you read the bill—

Hon Maurice Williamson: It covers synthetic. It covers synthetic only.

KRIS FAAFOI: If you read the bill and clause 9, “Meaning of psychoactive substance”, it does not say anywhere in that part of the bill that it is just synthetic substances. So that is something that I think needs to be addressed at the select committee.

David Cunliffe was the only other MP to raise the issue:

Hon DAVID CUNLIFFE: I also wish to just briefly record as a member of Parliament with a large Pacific Island community in my electorate the sensitivity around the issue of kava taking. It is a traditional substance, it is part of traditional routines, and we will want assurance from—

Hon Peter Dunne: Wrong bill. The natural products bill covers it.

Hon DAVID CUNLIFFE: Well, we will wait for the Minister to go on record when he is in the chair, and we look forward to that. We will want to have assurances from the Government that traditional cultural practices will not be inappropriately affected by this legislation

From the Bill:

Clause 9 defines a psychoactive substance as a substance, mixture,
preparation, article, device, or thing that is capable of inducing a
psychoactive effect in an individual who uses the psychoactive sub-
stance. Clause 9(c) specifically excludes controlled drugs (as speci-
fied or described in Schedule 1, 2, or 3 of the Misuse of Drugs Act
1975), precursor substances (as specified or described in Schedule 4
of that Act), medicines, herbal remedies, dietary supplements, and
food from the definition. Alcohol and tobacco products are also gen-
erally excluded from the definition of psychoactive substance unless
the alcohol or tobacco product contains a psychoactive substance.
In addition, clause 9(b)(ii) and (c)(ix) provide that the definition in-
cludes or excludes a substance, mixture, preparation, article, device,
or thing that is capable of inducing a psychoactive effect in an indi-
vidual that is declared, by the Governor-General by Order in Council
made under clause 81, to be or not be a psychoactive substance for
the purposes of the Bill.

There is more detail in Psychoactive Substances Bill – download PDF (1.2MB)

(c) does not include—

(iv) a herbal remedy (as defined in section 2(1) of the
Medicines Act 1981):
(v) a dietary supplement (as defined in regulation 2A 10
of the Dietary Supplements Regulations 1985):
(vi) any food (as defined in section 2 of the Food Act
1981):
(ix) a substance, mixture, preparation, article, device,
or thing that is, or that is of a kind or belonging to 25
a class that is, declared by the Governor-General
by Order in Council made under section 81 not
to be a psychoactive substance for the purposes
of this Act.

Kava isn’t specifically mentioned but it seems obvious the intent of the bill is to not cover natural substances like kava and ‘ava.  Perhaps it is something that needs to be clarified in the legislation, unless it is already adequately covered by one or more of the above exceptions. It should be given appropriate attention in the committee stage.

 

 

‘Young’ Labour summer school

Young Labour are currently running a summer school in Wainuiomata. From Facebook:

Grant Robertson and Morehu Rei open Young Labour Summer School 2013. Really good numbers gathering on the outskirts of Wainuiomata. looking forward to a weekend of working with this great group of young people determined to make a difference.

Young Labour

Joanne Nixon

How young is young. Looks to be a few old heads there lol!

Seems to be a bit of snow on the mountains this summer.