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Credit Contracts and Consumer Finance Act 2003

Transitional provisions

Schedule 1AA: Application, savings, and transitional provisions relating to amendments made to this Act after 1 January 2014

You could also call this:

"Changes to Credit Contract Rules from 2014 Onwards"

Illustration for Credit Contracts and Consumer Finance Act 2003

You need to know about the rules for credit contracts and consumer finance. The Minister can prepare a Responsible Lending Code before some parts of the law come into effect. The Code must be in force within 12 months of the law being approved. Some changes to the law do not apply to existing agreements. But some changes do apply, like rules about disclosing information and rules about lenders' responsibilities. You can find more information about these rules in the Credit Contracts and Consumer Finance Act 2003. Lenders must follow the new rules when they make changes to existing agreements or enter into new agreements. There are also new rules for high-cost consumer credit contracts. You can find more information about these rules in section 45E of the Credit Contracts and Consumer Finance Act 2003. Some creditors and mobile traders have extra time to comply with the new rules. They must apply for certification within a certain time frame. You can find more information about this in section 131B of the Credit Contracts and Consumer Finance Act 2003.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6150838.

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Money and consumer rights > Consumer protectionMoney and consumer rights > Banking and loans
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Schedule 1: Key information concerning consumer credit contract, or

"Important details about your consumer credit contract"

1AAApplication, savings, and transitional provisions relating to amendments made to this Act after 1 January 2014 Empowered by ss 8B, 141A

1Interpretation

  1. In this schedule,—

    2014 Act means the Credit Contracts and Consumer Finance Amendment Act 2014

      principal Act means the Credit Contracts and Consumer Finance Act 2003

        Regulatory Systems Act 2019 means the Regulatory Systems (Economic Development) Amendment Act 2019.

        Notes
        • Schedule 1AA clause 1: inserted, on , by section 79 of the Credit Contracts and Consumer Finance Amendment Act 2014 (2014 No 33).
        • Schedule 1AA clause 1 Regulatory Systems Act 2019: inserted, on , by section 34(1) of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).

        2Minister may prepare Responsible Lending Code before commencement of Part 1A

        1. The Minister may exercise or perform a power or duty under sections 9G to 9I (as inserted by the 2014 Act) before section 9 of the 2014 Act comes into force.

        2. Any consultation undertaken before section 9 of the 2014 Act comes into force that is of the kind referred to in section 9G(2)(b) or (e) must be treated as the consultation required for the purposes of that section (even if the consultation occurs before the enactment of the 2014 Act).

        3. The Minister must ensure that the Responsible Lending Code first comes into force no later than 12 months after the date on which the 2014 Act receives the Royal assent.

        Notes
        • Schedule 1AA clause 2: inserted, on , by section 79 of the Credit Contracts and Consumer Finance Amendment Act 2014 (2014 No 33).

        3Application of amendments to existing agreements

        1. Except as provided for in subclauses (2) and (3) and in clause 4,—

        2. the amendments to the principal Act in the 2014 Act do not apply to existing agreements; and
          1. the principal Act and the Credit (Repossession) Act 1997, as in force immediately before the commencement of this clause, continue to apply for the purposes of those agreements.

            1. The amendments referred to in subclause (1) apply in relation to existing agreements as follows:

            2. the amendments made by section 20 of the 2014 Act (request disclosure) apply only in relation to requests made on or after the commencement of that section:
              1. the amendments made by sections 18, 19, 44, and 47 of the 2014 Act (variation disclosure) apply only to variations that take effect on or after the commencement of those sections:
                1. the amendments made by section 16 of the 2014 Act (continuing disclosure statements) apply only to continuing disclosure statements that are, or required to be, given or sent on or after the commencement of that section:
                  1. the amendments made by section 22 of the 2014 Act (disclosure of transfers) apply only to transfers that take effect on or after the commencement of that section:
                    1. the amendments made by sections 37 to 41 of the 2014 Act (hardship applications) apply only to applications made on or after the commencement of those sections:
                      1. the lender responsibility principles (see section 9C(2) of the principal Act, as inserted by section 9 of the 2014 Act) apply only to the following:
                        1. a variation of a contract where the variation takes effect on or after the commencement of section 9 of the 2014 Act:
                          1. an application under section 55 of the principal Act made on or after the commencement of section 9 of the 2014 Act.

                          2. If a provision of the principal Act as amended or inserted by the 2014 Act applies in relation to an existing agreement under subclause (2), sections 93 and 96 of the principal Act (as amended by sections 59 and 63 of the 2014 Act) apply to a breach of that provision in relation to the existing agreement if the breach occurs on or after the commencement of this clause.

                          3. In this clause and in clause 4, existing agreement means any credit contract, security agreement, lease, buy-back transaction, or other contract or arrangement—

                          4. to which the principal Act or the Credit (Repossession) Act 1997 (as in force before this clause came into force) applies; and
                            1. that was entered into before this clause came into force.

                              Notes
                              • Schedule 1AA clause 3: brought into force, on , by section 79 of the Credit Contracts and Consumer Finance Amendment Act 2014 (2014 No 33).
                              • Schedule 1AA clause 3: inserted, on , by section 79 of the Credit Contracts and Consumer Finance Amendment Act 2014 (2014 No 33).
                              • Schedule 1AA clause 3(1): amended, on , by section 34(2) of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).
                              • Schedule 1AA clause 3(4): amended, on , by section 34(3) of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).

                              4Creditor may, by notice to debtors, apply Part 3A to existing agreements

                              1. Part 3A applies to the existing agreements described in this clause.

                              2. The existing agreements are those agreements—

                              3. to which Part 3A (as in force immediately before the commencement of the Regulatory Systems Act 2019) would have applied if the agreements had been entered into on or after the date on which Part 3A came into force; and
                                1. in respect of which neither a creditor nor a debtor has taken any action (such as issuing a pre-possession notice) under the principal Act or the Credit (Repossession) Act 1997, as in force immediately before the commencement of Part 3A; and
                                  1. in respect of which any creditor under the agreement has given notice to every debtor under the agreement—
                                    1. stating that Part 3A will apply to the agreement; and
                                      1. specifying the date on which Part 3A begins to apply to the agreement (which must be at least 5 working days after the last notice is given); and
                                        1. summarising the rights and obligations of the creditors and the debtors under Part 3A.

                                        2. Part 3A applies to an existing agreement on and from the date referred to in subclause (2)(c)(ii) as if that agreement were a consumer credit contract.

                                        3. On and from the date on which Part 3A begins to apply to an existing agreement, the Credit (Repossession) Act 1997 (as in force immediately before the commencement of Part 3A) ceases to apply for the purposes of the agreement.

                                        4. Section 83ZQ applies to the giving and receiving of a notice under subclause (2).

                                        Notes
                                        • Schedule 1AA clause 4: inserted, on , by section 34(4) of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).

                                        5Application of Part 3A and related provisions to existing credit contracts

                                        1. This clause applies to a credit contract if,—

                                        2. immediately before the Regulatory Systems Act 2019 came into force, Part 3A applied to the contract; but
                                          1. the contract is not a consumer credit contract.

                                            1. The following provisions continue to apply to the contract as if that contract were a consumer credit contract:

                                            2. section 5, definition of costs of borrowing:
                                              1. section 9B, definitions of agreement, lender, and relevant guarantee:
                                                1. section 9K:
                                                  1. Part 3A.

                                                    Notes
                                                    • Schedule 1AA clause 5: inserted, on , by section 34(4) of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).

                                                    6Interpretation

                                                    1. In clauses 7 to 11, unless the context otherwise requires,—

                                                      2019 Act means the Credit Contracts Legislation Amendment Act 2019

                                                        agreement means any credit contract, security agreement, lease, buy-back transaction, or other contract or arrangement to which the principal Act applies

                                                          commencement, in relation to any provision of the 2019 Act, or any provision inserted into this Act by the 2019 Act, means the commencement of the relevant provision, as the case may be

                                                            existing agreement means an agreement entered into before the commencement of the relevant provision

                                                              new agreement means an agreement entered into after the commencement of the relevant provision

                                                                principal Act means the Credit Contracts and Consumer Finance Act 2003 as it read before the relevant provision of the 2019 Act commenced.

                                                                Notes
                                                                • Schedule 1AA clause 6: inserted, on , by section 54 of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).
                                                                • Schedule 1AA clause 6 commencement: replaced, on , by section 35(2) of the COVID-19 Response (Taxation and Other Regulatory Urgent Measures) Act 2020 (2020 No 10).

                                                                7General rule: existing agreements

                                                                1. Except as provided for in clauses 8 to 10,—

                                                                2. an amendment to the principal Act in the 2019 Act does not apply to existing agreements:
                                                                  1. the principal Act continues to apply for the purpose of existing agreements, and for the completion of a matter or thing or the bringing or completion of proceedings that relate to existing agreements, as if the relevant provision of the 2019 Act had not commenced.

                                                                    Notes
                                                                    • Schedule 1AA clause 7: inserted, on , by section 54 of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).

                                                                    8Application to existing agreements: Royal assent commencement

                                                                    1. The amendment made by section 16(1) (decreases) of the 2019 Act applies to variation disclosure that is required to be made after commencement.

                                                                    2. The amendments made by sections 17(1), 18(1), and 19 (disclosure if creditor cannot locate) of the 2019 Act apply to disclosure that is required to be made after commencement.

                                                                    3. The amendments made by the following sections of the 2019 Act apply to existing agreements in respect of disclosure that is required to be made after commencement:

                                                                    4. section 22 (amendment to section 32(4)):
                                                                      1. section 23 (amendments to section 35).

                                                                        1. The amendments made by section 28 (amendments to section 83J) of the 2019 Act apply in respect of enforcement action that occurs after commencement.

                                                                        2. The amendments made by sections 30, 31, 32, and 34(2) of the 2019 Act apply in respect of existing agreements for breaches that occur after commencement.

                                                                        3. The amendments made by section 35 of the 2019 Act apply to existing agreements on or after commencement to the extent that section 95A (court may reduce effect of failure to make disclosure) applies to the costs of borrowing, costs of the lease, or costs of the buy-back transaction (as the case may be) in relation to any period after commencement.

                                                                          Example

                                                                          A creditor (C) and Ms S entered into a consumer credit agreement on 1 July 2019.

                                                                          C failed to make initial disclosure. C can rely after commencement on section 95A in respect of that failure, but only in respect of costs of borrowing in relation to the period after commencement.

                                                                        4. The amendments made by section 43 (pecuniary penalties) of the 2019 Act apply in respect of existing agreements for breaches or possible breaches that occur after commencement.

                                                                        5. The amendments made by section 46 (enforceable undertakings) of the 2019 Act apply to breaches in respect of existing agreements, whether those breaches occurred or occur before, on, or after commencement.

                                                                        Notes
                                                                        • Schedule 1AA clause 8: inserted, on , by section 54 of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).

                                                                        9Application to existing high-cost consumer credit contracts

                                                                        1. The amendments made by section 25 (new subpart 6A of Part 2) of the 2019 Act apply to an existing agreement as set out in this clause.

                                                                        2. Section 45E (costs of borrowing must not exceed loan advance) applies to an existing agreement as follows:

                                                                        3. section 45E restricts maximum costs of borrowing under an existing agreement only if the parties to the agreement agree to change the agreement with effect after commencement; and
                                                                          1. the rules in that section for calculating the first advance and whether a contract is a related consumer credit contract apply equally to all agreements (including those entered into before commencement).

                                                                              1. Example

                                                                              Before commencement, Ms D borrows $100 from a creditor (C) under a consumer credit contract that has an annual interest rate of 500% pa and a term of 6 weeks. Section 45E does not limit the amount that can be recovered under that contract.

                                                                              As at commencement, Ms D has repaid $92, consisting of $32 in interest and fees and $60 of the principal. Her unpaid balance is $40.

                                                                              After commencement, Ms D refinances by entering into a further high-cost consumer credit contract with C to repay the remaining $40, and will receive a further advance of $50, ie, $90 in total.

                                                                              The first advance of $100 in the pre-commencement contract caps the maximum costs of borrowing under the new contract. The maximum costs of borrowing that Ms D will have to pay under the new contract is $100 - $32 = $68 (ie, the amount in interest and fees charged on the first contract ($32) is subtracted from the first advance of $100 to give a remaining cap of $68).

                                                                            1. In section 45F (certain high-cost consumer credit contracts with other creditors prohibited), an existing agreement counts in the same way as a new agreement for the purpose of determining whether a person has had an unpaid balance on any high-cost consumer credit contract at any time within the preceding 15 days.

                                                                            2. In section 45G (high-cost consumer credit contracts with certain repeat debtors prohibited), an existing agreement counts in the same way as a new agreement for the purpose of determining whether a person has entered into a high-cost consumer credit contract at any time within the preceding 90 days.

                                                                            Notes
                                                                            • Schedule 1AA clause 9: inserted, on , by section 54 of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).
                                                                            • Schedule 1AA clause 9 heading: amended, on , by section 35(3) of the COVID-19 Response (Taxation and Other Regulatory Urgent Measures) Act 2020 (2020 No 10).

                                                                            10Other application to existing agreements

                                                                            1. The amendments to the principal Act made by section 10(1) and (8) of the 2019 Act apply to existing agreements in respect of material changes after commencement.

                                                                              Example

                                                                              A creditor (C) increases the credit limit under an existing consumer credit agreement after commencement.

                                                                              C must make reasonable inquiries about suitability and affordability before making the change. If C fails to comply, the debtor may seek statutory damages and C may be liable for civil pecuniary penalties as provided in Part 5A.

                                                                            2. The amendments made by section 20 of the 2019 Act (disclosure about dispute resolution schemes and financial mentoring services) apply to existing agreements in the same way as they apply to new agreements (for example, disclosure is required if a complaint is made after commencement regardless of whether the agreement is an existing or a new agreement).

                                                                            3. The amendments made by section 27 of the 2019 Act (duty of directors and senior managers of creditors) apply to duties and obligations of the creditor in respect of existing agreements that arise for performance after commencement or that continue to require performance after commencement.

                                                                            4. The amendment made by section 33 of the 2019 Act applies in respect of existing agreements for breaches that occur after commencement.

                                                                            5. The amendments made by sections 36 to 42 of the 2019 Act apply in respect of existing agreements for breaches that occur after commencement.

                                                                            6. The amendments made by section 48 of the 2019 Act (directors and senior managers may also be liable for statutory damages or compensation) apply, in respect of existing agreements, for breaches that occur after commencement of duties or obligations of the creditor that arise for performance after commencement or that continue to require performance after commencement.

                                                                            7. Section 131B (when person needs to be certified) of the principal Act (as inserted by section 50 of the 2019 Act) applies in respect of creditors or mobile traders who enter into a new credit contract, or agree a variation to an existing credit contract, after commencement.

                                                                            8. The amendments made by section 51 of the 2019 Act (disclosure about debt collection) apply to all existing agreements to the extent that debt collection starts after commencement or a new person becomes a debt collector after commencement.

                                                                              Example

                                                                              A creditor (C) and Ms S enter into a consumer credit agreement on 1 July 2019.

                                                                              C starts debt collection on or after commencement. Section 132A will apply to the debt collector.

                                                                            Notes
                                                                            • Schedule 1AA clause 10: inserted, on , by section 54 of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).
                                                                            • Schedule 1AA clause 10(1) example: amended, on , by section 35(4) of the COVID-19 Response (Taxation and Other Regulatory Urgent Measures) Act 2020 (2020 No 10).
                                                                            • Schedule 1AA clause 10(8) example: amended, on , by section 35(5) of the COVID-19 Response (Taxation and Other Regulatory Urgent Measures) Act 2020 (2020 No 10).

                                                                            11New agreements

                                                                            1. The amendments to the principal Act in the 2019 Act apply to new agreements.

                                                                            2. Section 41A(3) of the principal Act (as inserted by section 24 of the 2019 Act) applies to new agreements regardless of whether the change occurred before, on, or after commencement.

                                                                            Notes
                                                                            • Schedule 1AA clause 11: inserted, on , by section 54 of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).

                                                                            12Creditors registered as financial service providers before commencement and mobile traders

                                                                            1. Subclause (2) applies to every creditor that is registered under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 as at the close of the day before commencement of section 131B and that is required to be certified under Part 5A of this Act.

                                                                            2. Section 131B does not apply until the first due date on or after commencement of section 131B on which the person must supply to the Registrar its annual confirmation of details under section 28 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008.

                                                                            3. Subclause (5) applies to every creditor—

                                                                            4. that has made an application to the Commerce Commission in accordance with section 131F no less than 2 months before the first due date referred to in subclause (2); and
                                                                              1. that is registered under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 as at the close of the day before commencement of section 131B.

                                                                                1. Subclause (5) also applies to every mobile trader that has made an application to the Commerce Commission in accordance with section 131F before 2 months before commencement of section 131B.

                                                                                2. Section 131B does not apply to that person before the earlier of the following:

                                                                                3. the close of the 20th working day after the person has failed to provide to the Commission any information that the Commission has required under section 131F(3) to assist it in determining the application:
                                                                                  1. the date on which the Commission gives a written notice of decision to the person under section 131I.

                                                                                    Notes
                                                                                    • Schedule 1AA clause 12: inserted, on , by section 54 of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).
                                                                                    • Schedule 1AA clause 12 heading: amended, on , by section 35(6) of the COVID-19 Response (Taxation and Other Regulatory Urgent Measures) Act 2020 (2020 No 10).
                                                                                    • Schedule 1AA clause 12(1): amended, on , by section 35(7) of the COVID-19 Response (Taxation and Other Regulatory Urgent Measures) Act 2020 (2020 No 10).
                                                                                    • Schedule 1AA clause 12(2): amended, on , by section 35(8) of the COVID-19 Response (Taxation and Other Regulatory Urgent Measures) Act 2020 (2020 No 10).
                                                                                    • Schedule 1AA clause 12(3)(b): amended, on , by section 35(7) of the COVID-19 Response (Taxation and Other Regulatory Urgent Measures) Act 2020 (2020 No 10).
                                                                                    • Schedule 1AA clause 12(4): amended, on , by section 35(9) of the COVID-19 Response (Taxation and Other Regulatory Urgent Measures) Act 2020 (2020 No 10).