I have been campaigning hard for more than 18 months to stop the damage done by loan sharks who lend irresponsibly and at excessive interest rates.
There is overwhelming community support including from our hard working budgeting services and food banks. They are in the front line, dealing with the harm faced by families, for action to be taken by the Government.
Despite this, vulnerable consumers remain at risk as the Government continues to allow loan sharks to exploit the rising costs faced by struggling New Zealanders. Kiwi families are compelled to choose between putting food on the table, gas in the car and taking the children to the doctor.
The current environment with families facing an ever-increasing cost of living finds loan sharks ready and open for business.
They are willing to exploit the lack of options many have to make ends meet.
As a part of continuing to demand Government action, I recently launched a community alliance against loan shark exploitation.
A number of organisations including the Salvation Army, the New Zealand Federation of Family Budgeting Services, FINSEC, the Child Poverty Action Group, The New Zealand Association of Credit Unions are supporting the initiative.
Budgeting expert Darryl Evans and a number of others are taking ownership of this campaign. Together, they will stand up and advocate for vulnerable consumers.
Parliamentary action
The Labour Party will remain actively involved in this coalition by leading the charge in Parliament.
My Parliamentary colleague (Waitakere Labour List MP) Carmel Sepuloni and I will be entering Members Bills in the Ballot to put legislative options for dealing with excessive interest rates and requiring responsible lending.
There are of course broader issues surrounding this debate, such as the need for better financial literacy, lifting income levels and improving access to credit on a reasonable basis. These issues must also be addressed.
Following the campaign re-launch, the Financial Services Federation released Responsible Lending Guidelines, which I welcomed as a step in the right direction.
The Government used the release of these guidelines as a half-hearted attempt to look proactive in the face of an increasing and serious problem in the consumer sector. The guidelines are a promising initiative but are voluntary.
It is the Government’s role to legislate against the excessive behaviour shown by the worst predatory operators. There is a need to ensure that lenders are required to uphold strict criteria for lending, not place the burden back on consumers to hold loan sharks to account.
This Government has to answer a number of questions. These include ‘What is being done to limit excessive interest rates? What is happening with the delayed review of the Credit Contracts and Consumer Finance Act?’
The Government’s inaction shows that they see victims of loan sharks as simply having made more ‘poor choices’. The problem is bigger than this, and it is the Government’s responsibility to take some decisive action.
Carol Beaumont is Member of Parliament on Labour List and is the Party’s Spokesperson for Consumer Affairs Spokesperson. The above article is exclusive to Indian Newslink ©
