The Reserve Bank is reviewing the rules for finance companies, building societies and credit unions.
The central bank has released a consultation paper on its review of the prudential regime for non-bank deposit takers, including who qualifies, and ensuring the right supervision arrangements are in place.
Banks dominate the market, accounting for about 95%.
Even at its height, assets held by non-bank deposit takers such as finance companies, building societies and credit unions stood at just $25 billion and about 8% of total lending.
But the collapse of the finance sector and the move by three major lenders to become banks has shrunk the sector to half that size, and 3% of lending.
Despite that the Reserve Bank says the sector provides a valuable alternative to depositors and lenders.
New rules have been in place since late 2010, including the need for a credit rating, capital reserves of at least 8% and limits on related party lending.
The central bank says the current regime has worked well and ensured the soundness of the sector but it is time to review whether the rules are still appropriate, or need changing.
For example, it wonders whether the definition of non-bank deposit takers needs to be amended to reflect changes among the second tier lenders, or whether the Reserve Bank should take over the direct supervision of them from trustees, and whether the rules should be even closer to those covering banks.
Submissions close in the middle of next month.
