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Credit Contracts and Consumer Finance Act 2003

Consumer credit contracts - Provisions relating to debtors under high-cost consumer credit contracts - Purpose, outline, and interpretation

45D: Power to increase interest rate that defines high-cost consumer credit contract

You could also call this:

"The Governor-General can increase the interest rate for high-cost loans if recommended by the Minister."

Illustration for Credit Contracts and Consumer Finance Act 2003

The Governor-General can increase the interest rate that defines a high-cost consumer credit contract. You need to know that the Minister must recommend this increase first. The Minister can only make this recommendation if they think the increase is necessary because of a rise in market interest rates, and if they have talked to the Reserve Bank of New Zealand and the Commission. You can find out more about what this means for the law by looking at the Legislation Act 2019. If the Governor-General makes this change, it will be secondary legislation, which is a type of law made by the government.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS352904.

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Topics:
Money and consumer rights > Consumer protection
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Part 2Consumer credit contracts
Provisions relating to debtors under high-cost consumer credit contracts: Purpose, outline, and interpretation

45DPower to increase interest rate that defines high-cost consumer credit contract

  1. The Governor-General may, by Order in Council made on the recommendation of the Minister, increase the interest rate that defines a high-cost consumer credit contract (the increase).

  2. However, the Minister may make a recommendation only if he or she—

  3. is satisfied that the increase is no greater than is necessary to take account of a rise in market interest rates; and
    1. is satisfied that the increase is necessary or desirable in order to avoid harm or disruption to credit markets that would otherwise be caused by the rise in market interest rates (that is, because more credit contracts would be within the bracket than would be the case if the rise in market rates had not occurred); and
      1. is satisfied that the increase is not inconsistent with the purpose of this subpart; and
        1. has consulted the Reserve Bank of New Zealand and the Commission.

          1. An order under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

          Notes
          • Section 45D: inserted, on , by section 25 of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).
          • Section 45D(3): inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).