Government announces changes to responsible lending rules

23 June 2022

On 11 March 2022, the Government announced that it would "make practical amendments to the responsible lending rules to curb any unintended consequences caused by [the December 2021 amendments to] the Credit Contracts and Consumer Finance Act 2003 (CCCFA)" and proposed a set of initial changes to the responsible lending code and regulations under the CCCFA regime.  

On 9 June 2022, the Government announced that it had finalised this first set of changes, which come into force on 7 July 2022.

This article provides background, summarises the changes in this latest announcement and sets out the next steps for changes to the CCCFA regime.

If you require guidance in understanding how these changes might impact you or require advice on how to remain compliant with the responsible lending rules under the CCCFA, please contact a member of our financial services regulation team.


In December 2021, a wide range of amendments to the CCCFA regime came into force that were designed to protect vulnerable borrowers from predatory lending.  However, the amendments have attracted criticism for being overly prescriptive.  For a detailed overview of the December 2021 changes to the CCCFA regime, please see our previous article (CCCFA - the case for a more 'principles-based' approach to affordability requirements).

Following this criticism, in January 2022 the Government announced an investigation into the impact of the changes to the CCCFA led by the Ministry of Business, Innovation and Employment (MBIE) and the Council of Financial Regulators.  For more information on this, please see our previous article (CCCFA investigation fast-tracked due to wide-spread concern).

On 11 March 2022, the Government announced that, while MBIE's investigation was ongoing, Cabinet had agreed to initial changes to the Credit Contracts and Consumer Finance Regulations 2004 (Regulations) and the Responsible Lending Code (RLC) "to address some of the concerns that have been heard in the investigation so far". 

In April 2022, the Government released an exposure draft of the initial changes to the Regulations and RLC and ran a short public consultation on these proposed changes.  On 9 June 2022, the Government announced that it had finalised the proposed changes to the Regulations and RLC to reflect the feedback from this consultation.  

Overview of the changes

The initial changes to the Regulations and the RLC announced on 9 June 2022 are as follows:

  • Removing regular 'savings' and 'investments' as examples of outgoings that lenders need to inquire into when assessing a borrower's likely expenses
  • Clarifying that when borrowers provide detailed breakdown of future living expenses, and these are benchmarked against robust statistical data, there is no need to inquire into current living expenses from recent bank transactions
  • Clarifying that when lenders estimate expenses from recent bank transaction records, they can ask the borrower about how expenses are likely to change once they enter into a loan agreement
  • Clarifying that the requirement to obtain information in 'sufficient detail' only relates to information provided by borrowers directly rather than relating to information from bank transaction records
  • Providing further guidance that a 'reasonable surplus' is not required if a lender has applied adequate buffers and adjustments to incomes and expenses
  • Providing alternative guidance and examples for when it is 'obvious' that a loan is affordable.
Next steps

The MBIE investigation was carried out in parallel to these changes and the Minister of Commerce and Consumer Affairs has received a final report on the findings of this investigation.

It is expected that this report will be released in July 2022.