Loan shark law consultation extended

File Photo / NZ Herald

Consultation on a tough new loan shark law has been extended by a fortnight as Consumer Affairs Minister Simon Bridges holds a series of meetings on the issue.

Submissions on the Credit Contracts and Consumer Finance Amendment Bill were due to close in two weeks but the consultation period has now been extended until May 25.

The bill aims to tackle unscrupulous lenders that target poor communities, leaving families trapped in a spiral of debt.

Mr Bridges said the bill was a comprehensive package to crackdown on loan sharks and give borrowers much greater protection.

He will meet with community and industry groups in Wellington, Auckland and Christchurch to discuss the proposed changes in the next two weeks.

"This draft law represents the biggest change to consumer credit legislation in a decade and it's important to get it right.

"I'm looking forward to a frank discussion with community and industry representatives on the issues we face and the proposals this Government has put forward."

The bill would make it illegal to lend money to someone if repayments would likely lead to substantial hardship.

Lenders would have to give more timely and complete details of loan terms; extend the period in which borrowers could cancel a loan; and consider applications from borrowers for hardship relief.

Other changes include a new responsible lending code and better controls on misleading, deceptive or confusing advertising.