Review of consumer credit, financial conduct and dispute resolution regulation

22 May 2024

As foreshadowed earlier this year by the Minister of Commerce and Consumer Affairs, Andrew Bayly, the Government has launched a three-part consultation on the regulation of consumer credit, financial services conduct and financial dispute resolution with a view to removing undue compliance costs and promoting fair, efficient and transparent financial markets.

The three consultation documents address:

  • Fit for purpose consumer credit legislation, including the transfer of regulatory responsibility for the Credit Contracts and Consumer Finance Act 2003 (CCCFA) from the Commerce Commission to the Financial Markets Authority (FMA), removal of prescriptive affordability requirements and a range of other changes;
  • Fit for purpose financial conduct regulation including options to amend:
    • the fair conduct principle and minimum requirements for fair conduct programmes under the regime introduced by the Financial Markets (Conduct of Institutions) Amendment Act 2022 (CoFI regime).
    • the Financial Markets Conduct Act 2013 regulatory framework, including consolidating licences to cover more than one class of market service, introducing 'change of control' approval requirements for licensed firms and conferring broader powers on the FMA (for example, to conduct on-site inspections and the power to firms to obtain expert reports).
  • Effective financial dispute resolution including options for improving consumer access and awareness, and enhancing the effectiveness of dispute resolution schemes (for financial services) through improved oversight and accountability.

Timing of implementation and implications for compliance with the CoFI regime

Financial Institutions gearing up for the CoFI regime should note that there are no plans to change the current CoFI regime commencement date of 31 March 2025 so financial institutions will need to continue their preparations for compliance with the current CoFI regime.

Legislation to implement the reforms arising from the three-part consultation is not expected to be passed before the third quarter of 2025, with commencement of any changes to the CoFI regime not commencing until 2026 at the earliest.

Have your say 

MBIE acknowledges that the discussion documents have been prepared under time constraints, with no, or limited, industry consultation. The consultation period is also short, closing at 5pm on the 19th of June 2024.

We encourage you to engage with the proposed reforms early. If you require assistance with making a timely submission, please get in touch with one of our experts.

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