2024-25 financial services reforms

About the reforms package 

In January 2024, the Minister of Commerce and Consumer Affairs announced plans to reform aspects of New Zealand’s financial services regulation.  

These reforms aim to streamline the financial services regulatory landscape and remove unnecessary compliance costs currently imposed on financial services. The package of reforms will improve outcomes for consumers by ensuring New Zealanders can confidently access the financial products and services they need in a way that is safe. 

Together, these reforms aim to provide regulatory clarity, protect vulnerable consumers and grow the economy. 

MBIE has publicly consulted on possible amendments to the Credit Contracts and Consumer Finance Act (CCCFA), including changes to the high-cost credit provisions, the Financial Markets (Conduct of Institutions) Act (CoFI) and financial markets conduct licencing, and financial dispute resolution. Submissions received informs advice to the Minister of Commerce and Consumer Affairs on possible reforms.

We also consulted on changes to the Responsible Lending Code, which provide guidance following the revocation of the CCCFA affordability regulations. These changes to the Code were published on 2 July and will come into force on 31 July.

Related information: 

Reducing barriers for financial services(external link) — Beehive.govt.nz 

Speech at Financial Services Council Outlook 2024(external link) — Beehive.govt.nz 

Supporting better financial outcomes for Kiwis(external link) — Beehive.govt.nz

Cabinet decisions

On 2 September 2024, Cabinet made a number of policy decisions to reform New Zealand’s financial services sector as part of Phase 2.

Improving access to finance for Kiwis(external link) — Beehive.govt.nz

The Cabinet paper and accompanying appendices can be found below:

Phase 1 

Phase 1 of the reforms involved:

• Regulations under the CCCFA to fully exempt: 
  • voluntary targeted rates schemes provided by local authorities from the CCCFA – such as loans to install insulation or heat pumps – without the need to pay additional compliance costs. This exemption took effect on 25 April 2024.
  • entities whose primary business is non-financial goods and services, such as certain car dealers, from duplicative CCCFA reporting requirements. This exemption took effect on 25 April 2024. 

Credit Contracts and Consumer Finance Amendment Regulations 2024(external link) — New Zealand Legislation

• Regulations under the CCCFA commencing 31 July to:
  
  • revoke redundant regulations relating to COVID-19 (commenced)
  • revoke prescriptive affordability requirements in the Credit Contracts and Consumer Finance Regulations 2004 that were intended to clarify what constitutes reasonable inquires to assess whether a borrower can make the repayments for a prospective loan without suffering substantial hardship (commencing 31 July 2024). 
• Amending the Responsible Lending Code to support lenders to responsibly ensure lending is affordable once the affordability regulations have been revoked.
• Regulations to align certain jurisdictional rules for the four approved financial dispute resolution schemes. The Dispute Resolution Scheme rules regulations commence 18 July 2024.  

Public submissions on amending the Responsible Lending Code closed on 10 June 2024.

Financial Service Providers (Rules for Approved Dispute Resolution Schemes) Regulations 2024(external link) — New Zealand Legislation

Consultation closed – Proposed changes to the Responsible Lending Code

Public submissions on amending the Responsible Lending Code closed on 10 June 2024.

Submissions made for this consultation are now available.

Proposed changes to the Responsible Lending Code

Phase 2 

Phase 2 involves a more substantive review of various pieces of financial services legislation, including: 

• Progressing legislative reform to transfer regulatory responsibility for the CCCFA from the Commerce Commission to the FMA. 
• Reviewing obligations imposed on financial institutions under the Financial Markets (Conduct of Institutions) Amendment Act 2022, alongside reviewing the conduct licensing framework in the Financial Markets Conduct Act 2013 to improve clarity, remove unnecessary compliance costs and improve outcomes for consumers.  
• Reviewing the CCCFA to: 
  • assess the effectiveness of the CCCFA’s high-cost credit provisions and consider any reforms to ensure those provisions meet their objectives  
  • address potential areas of under-performance, including the liability settings and disclosure obligations 
• reviewing the accessibility and effectiveness of the financial dispute resolution system.

Public submissions on Phase 2 closed on 19 June 2024. They will be published in due course.

Consultation closed – Fit for purpose financial services reform

Public submissions closed on 19 June 2024.  

Fit for purpose financial services reform

You can find the submissions here:

Financial services conduct regulation submissions

Financial dispute resolution submissions

Consumer credit legislation submissions

Other relevant links

Supporting better financial outcomes for Kiwis(external link) — Beehive.govt.nz

Conduct of financial institutions regime

Review of consumer credit law

Consumer credit research