13 Aug 2011

Minister supports mandatory code of lending

3:47 pm on 13 August 2011

Consumer Affairs Minister Simon Power says he supports a mandatory code of lending in the financial loans industry.

The Minister has promised a crackdown on loan sharks and says there is no option but to act against those who prey on the vulnerable.

He told Morning Report credit is important but he believes people who enter into short-term loans need to have a full understanding of the costs involved.

Mr Power says he is concerned at the number of third-tier lenders, who provide personal non-mortgage credit, being seen in at-risk areas such as south Auckland.

A financial summit was held in Auckland on Thursday to discuss solutions for problem debt in New Zealand.

The summit, attended by about 250 people, also had on its agenda the financial literacy of borrowers and lenders and financial advertising.