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Deposit Takers Act 2023

Regulation of deposit takers - Credit rating

69: Licensed deposit taker must give public notice of downgrade

You could also call this:

"Bank or lender must tell public if their credit rating gets worse"

Illustration for Deposit Takers Act 2023

If you are a licensed deposit taker and your credit rating is downgraded, you must tell the public about it. You have to put a notice on your website within 10 working days of the downgrade. The notice can include extra information that helps people understand why your credit rating was downgraded.

You might wonder what a downgrade is. It happens when a special agency gives you a credit rating that is lower than your previous one. This agency is called an approved rating agency.

If you do not follow this rule, you can get in trouble and have to pay a fine of up to $50,000 or an infringement fee of $20,000.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS475779.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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68: Licensed deposit taker must not disclose or advertise credit ratings from non-approved agencies, or

"Licensed deposit takers can't share or advertise unapproved credit ratings with investors."

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70: Bank may grant exemptions from credit rating requirements, or

"The Bank can choose to exempt some people from credit rating rules and must explain why."

Part 3Regulation of deposit takers
Credit rating

69Licensed deposit taker must give public notice of downgrade

  1. If a licensed deposit taker’s credit rating is downgraded, the deposit taker must give notice of the downgrade.

  2. The notice—

  3. must be published on an Internet site maintained by, or on behalf of, the deposit taker; and
    1. must be published within 10 working days after the downgrade is given; and
      1. may include any additional matter that the deposit taker considers is relevant to a proper understanding of the reasons for the downgrade.

        1. In this section, a deposit taker’s credit rating is downgraded if it is given a credit rating by an approved rating agency that is lower than its immediately preceding credit rating.

        2. A licensed deposit taker that contravenes this section commits an infringement offence and is liable to—

        3. an infringement fee of $20,000; or
          1. a fine imposed by a court not exceeding $50,000.