May 09, 2019
Iwi chairs keen on loan shark crackdown
The Iwi Chairs Forum has joined with budgeting services and other national organisations in calling for the Government to toughen its proposed loan shark law.
Spokesperson Sonny Tau says a cap on interest rates is essential because of the way lenders target the most vulnerable.
The proposed law includes a maximum people can repay, but unlike in other countries does not attempt to cap interest rates.
Tim Barnett from lobby group FinCap says a new report from economists BERL shows the Government’s plan to limit the total cost of loans will have little effect if it is not accompanied by a cap on the maximum interest rate that can be charged.
He says it’s the difference between facing the hardship of paying 200 percent of a loan back in a matter of weeks or having time to pay it back sustainably over a longer time.
Without a cap borrowers and their children will continue to have to choose between basics like food and electricity and debt repayment.
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