Government introduces lending law exemption to help with North Island flooding

Published: 22 February 2023

The government has made a temporary exemption to the Credit Contracts and Consumer Finance Act (CCCFA) for temporary lending to consumers affected by the recent extreme weather in the North Island.

This exemption means that temporary credit can be provided to affected consumers quickly to address damage, replace property, and help consumers meet their everyday living costs and provide for a loss of income.

The exemption removes the requirement under the CCCFA for affordability assessments for temporary overdrafts and home loan top-ups of up to $10,000, supplied to existing customers, to allow borrowers to address the impacts of recent extreme weather events in the North Island. The lending arrangement must be entered into before 31 March 2023.

Banks and non-bank deposit takers, as well as some finance companies, will be able to offer finance to existing customers under the exemption.  

The exemption is accompanied by several safeguard conditions which seek to provide additional protections for those borrowers receiving exempted lending. In addition to these safeguard conditions, the Government expects lenders to set reasonable interest rates and fees for any lending under the exemption.

While this exemption will open up the provision of quick credit to affected consumers, consumers are encouraged to firstly consider making use of the support already available to communities such as the Mayoral Relief Fund, and through Work and Income.

Read the regulations

Credit Contracts and Consumer Finance (Exemption for Emergency Relief) Amendment Regulations 2023 (SL 2023/7)(external link) — New Zealand Legislation

Credit Contracts and Consumer Finance (Exemption for Emergency Relief) Amendment Regulations (No 2) 2023 (SL 2023/9) Contents(external link) — New Zealand Legislation

Read the Minister's press release

Easier access to finance for those affected by the floods(external link) —

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