Social Development Minister Paula Bennett welcomes today’s launch of Responsible Lending Guidelines by the Financial Services Federation.
“Personal responsibility is important when it comes to borrowing money, but lending services should not be lending to people they know are incapable of servicing a loan,” says Ms Bennett.
“These guidelines will act as benchmark for socially responsible lending to vulnerable clients, loan sharking should not be tolerated,” says Ms Bennett.
The guidelines are part of a joint venture between the Ministry of Social Development and the Financial Services Federation and educate people on what to expect from lending institutions to improve customer protection.
They also call for more careful consideration of borrower’s loan security and increased interest rate transparency so people know exactly how much a loan will cost them above the loan amount.
“Kiwis have a strong credit culture, we are all guilty of buying things we don’t need with money we don’t have,” says Ms Bennett.
“But when things are tight, people should not be getting into more debt than they can handle and lenders should do the right thing when they know this is happening,” says Ms Bennett.
The guidelines are available at: www.fsf.org.nz