Catholic Agencies Urge MPs To Send Responsible Lending Bill To Select Committee

Two national Catholic agencies are asking MPs to send a private members’ bill to Select Committee to enable a debate about interest-rate caps to take place in Parliament.

Michael Smith, CEO of Caritas Aotearoa New Zealand, and Anne-Marie McCarten, National Executive Officer of the Society of St Vincent de Paul, say they would like to make a submission on Carol Beaumont’s private member’s bill Credit Reforms (Responsible Lending) Bill.

Michael Smith said the issue of extraordinary interest rates has been debated in different countries, such as Canada where “criminally high interest rates” above 60 percent are banned. “Extreme rates of interest, and other unethical lending practices, trap people into unaffordable situations.”

Anne-Marie McCarten says the lack of a cap on rates able to be charged by New Zealand loan sharks causes extreme hardship among vulnerable communities here. “It isn’t uncommon for families coming to our groups for help to have more than one loan, and we wonder if people realise the terrible position they are putting themselves in.”

The two agencies wrote to the Minister of Consumer Affairs in May asking her to support the private member’s bill to Select Committee. She replied that she has reservations about interest rate caps but invited the agencies to make a late submission to the Ministry of Consumer Affairs 2009 review of credit legislation.

Michael Smith said the Catholic groups are happy to contribute to all processes reviewing credit practices, particularly those which affect vulnerable people. “However, we believe there is great benefit in including extreme interest-rate limits in that discussion, and would like to contribute to that through the Select Committee process.”

Caritas Aotearoa New Zealand is a member of Caritas Internationalis, a confederation of 165 Catholic aid, development and social justice agencies active in over 200 countries and territories.

ENDS

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