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Credit Contracts and Consumer Finance Act 2003

Consumer credit contracts - Duty of directors and senior managers of creditors under consumer credit contracts

59B: Duty of directors and senior managers of creditors

You could also call this:

"Company bosses must make sure their business follows the lending rules."

Illustration for Credit Contracts and Consumer Finance Act 2003

You are a director or senior manager of a company that lends money to people. You must make sure your company follows the rules. You have to be careful and make good decisions to ensure your company does what it is supposed to do. This means you must think about the kind of business you are in and your role in the company. You must take reasonable steps to ensure your company follows the rules. This includes making sure your employees and agents follow the right procedures. You must also find and fix any problems with these procedures. In some special situations, like securitisation, this rule applies in a specific way set out in the regulations. You can find more information about these situations in section 138(1)(da).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS626460.

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Topics:
Money and consumer rights > Consumer protectionMoney and consumer rights > Banking and loansBusiness > Industry rules
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"How to give important notices in writing to someone"

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"Hiring goods for personal use, like renting something for a year or more."

Part 2Consumer credit contracts
Duty of directors and senior managers of creditors under consumer credit contracts

59BDuty of directors and senior managers of creditors

  1. Every director and senior manager of a creditor under a consumer credit contract must exercise due diligence to ensure that the creditor complies with its duties and obligations under this Act.

  2. For the purposes of subsection (1), the director or senior manager must exercise the care, diligence, and skill that a reasonable director or senior manager (as the case may be) would exercise in the same circumstances, taking into account (without limitation)—

  3. the nature of the business (for example,—
    1. its size:
      1. the nature of the credit provided); and
      2. the position of the director or senior manager and the nature of the responsibilities undertaken by the director or senior manager.

        1. In this section, due diligence includes taking reasonable steps to ensure that the creditor—

        2. requires its employees and agents to follow procedures, or has implemented automated procedures, that are designed to ensure compliance with this Act and the regulations; and
          1. has in place methods for systematically identifying deficiencies in the effectiveness of the procedures for compliance; and
            1. promptly remedies any deficiencies discovered.

              1. In any circumstances prescribed under section 138(1)(da) (being circumstances that relate to securitisation or covered bond arrangements or similar arrangements), this section applies as stated in the regulations.

              Compare
              Notes
              • Section 59B: inserted, on , by section 27 of the Credit Contracts Legislation Amendment Act 2019 (2019 No 81).