Should the election outcome reflect the polls and put National into office, there will be significant changes to the regulation of the financial services and finance sectors.
National has announced that it will pare back the Conduct of Financial Institutions regime (CoFI), undo the recent reforms to the Credit Contracts and Consumer Finance Act (CCCFA), and create more choice for KiwiSaver members.
National voted against the CoFI Bill, arguing that it was unnecessary as the Reserve Bank/Financial Markets Authority Conduct and Culture Review found no systemic issues that needed addressing.
And National’s Commerce and Consumer Affairs spokesperson Andrew Bayly
has indicated that a National-led Government will remove the conduct licencing requirement and amend CoFI to require a risk-based approach that focuses on product design, engaging with customers, fee structures and complaints handling.
National agrees with some aspects of the Act – in particular the stronger consumer protections around mobile traders, the fit and proper person tests, and the power to deem certain payment arrangements to be consumer credit contracts.
However, it considers that credit availability is unduly restricted by the total of cost of credit cap and the borrower affordability assessment requirements.
It has said it will “maintain tight restrictions on predatory lenders, but significantly reduce the scope of Labour’s other changes to the CCCFA”.
National is also promising legislation to enable KiwiSaver members to split their savings across multiple KiwiSaver providers.
Removing employment from the Reserve Bank’s monetary policy mandate and returning it to a single focus on inflation is on National’s “action plan” for the first 100 days and is also actively supported by Act.
Chapman Tripp Comment
In an area where there has historically been a high level of bi-partisan support for regulatory design, this election bucks the trend somewhat, which makes for an interesting time for the industry.
Financial institutions have been assessing how to respond to the National Party’s CoFI announcement in their CoFI preparations planning. Some are boxing on while others are taking a wait and see approach until the election outcome is known.
The proposed KiwiSaver changes similarly have been met with a range of responses, including questions relating to implementation and operational detail, which should be able to be resolved in the policy development stage.
Other articles in our Election Insights 2023 series:
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