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Credit Contracts and Consumer Finance Act 2003

Lender responsibilities - Responsible Lending Code

9F: Content of Responsible Lending Code

You could also call this:

"Rules to Help Lenders Make Fair Decisions"

Illustration for Credit Contracts and Consumer Finance Act 2003

The Responsible Lending Code is a set of rules to help lenders make good decisions. You need to know what the code says to understand how lenders work. The code tells lenders what to do when they lend money to people. The code may say what lenders should do before they lend money. This includes checking if the borrower can afford to pay back the loan. You can read more about this in section 9C(3)(a), (4)(a), and (5)(a). The code also says lenders should be honest and fair in their advertising. The code tells lenders how to treat borrowers and their property. It says lenders should not be mean or unfair to borrowers. You can read more about this in Part 5. The code also says lenders should make sure fees are not too high. The code may have different rules for different types of lenders or borrowers. It may say what lenders should do when collecting debts. You can read more about this in Part 3A. The code is there to help lenders make good decisions and be fair to borrowers.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6501322.

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Topics:
Money and consumer rights > Consumer protectionMoney and consumer rights > Banking and loans
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9E: Purpose of Responsible Lending Code, or

"A guide to help lenders make fair and safe decisions when lending money to you"

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9G: Preparation and issue of Responsible Lending Code, or

"The Minister creates and shares the Responsible Lending Code to help with fair borrowing rules."

Part 1ALender responsibilities
Responsible Lending Code

9FContent of Responsible Lending Code

  1. In order to achieve its purpose, the Responsible Lending Code may set out any, or all, of the following:

  2. the nature and extent of inquiries a lender should make before entering into an agreement, before a relevant guarantee is given, or before a relevant insurance contract is entered into:
    1. the processes, practices, or procedures that a lender should follow—
      1. to ensure that advertising for providing credit or finance under agreements complies with the advertising standards set in the regulations and is not, or is not likely to be, misleading, deceptive, or confusing to borrowers:
        1. when making reasonable inquiries referred to in section 9C(3)(a), (4)(a), and (5)(a) so as to be satisfied of the matters referred to in those paragraphs and to comply with the regulations relating to those requirements:
          1. to give the assistance referred to in section 9C(3)(b) and (c), (4)(b), and (5)(b) (including where the borrower or guarantor may not have a good understanding of the language in which the lender is otherwise providing information):
            1. to ensure that the lender treats borrowers, guarantors, and their property (or property in their possession) reasonably and in an ethical manner:
              1. in the case of an agreement or a guarantee to which Part 5 applies, to ensure that the agreement or guarantee is not oppressive, the lender does not exercise a right or power conferred by the agreement or guarantee in an oppressive manner, and the lender does not induce the borrower to enter into the agreement, or the guarantor to give the guarantee, by oppressive means:
                1. to promote or facilitate compliance with the legal obligations referred to in section 9C(3)(f) and (4)(e) (for example, by reference to compliance programmes):
                  1. to ensure that fees are not unreasonable in terms of section 41, 80, or 82:
                  2. the circumstances in which the lender should require or recommend independent legal advice to be obtained:
                    1. the processes, practices, or procedures that a lender should follow for the purposes of Part 3A:
                      1. the processes, practices, or procedures that a lender should follow for the purposes of debt collection:
                        1. any other matter that promotes or facilitates the lender responsibility principles (set out in section 9C(2)) and that is not inconsistent with any other enactment.

                          1. The Code may also contain different provisions in relation to particular—

                          2. lenders or classes of lenders:
                            1. borrowers or classes of borrowers:
                              1. guarantors or classes of guarantors:
                                1. agreements or classes of agreements.

                                  Notes
                                  • Section 9F: inserted, on , by section 9 of the Credit Contracts and Consumer Finance Amendment Act 2014 (2014 No 33).
                                  • Section 9F(1)(b)(i): amended, on , by section 12(1) of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).
                                  • Section 9F(1)(b)(ii): amended, on , by section 12(2) of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).
                                  • Section 9F(1)(b)(iii): amended, on , by section 12(3) of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).
                                  • Section 9F(1)(da): inserted, on , by section 12(4) of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).