Media release: FIRST Union
Monday 2 April, 2012

Loan Sharks Will Still Bite Without Interest Rate Caps

FIRST Union, the union representing finance sector workers said reform of loan sharks would not be complete without the introduction of interest rate caps.

“The government changes announced today by the Consumer Affairs Minister will not stop loan sharks targeting the needy,” said FIRST Union Finance Secretary Andrew Casidy.

“Irresponsible lenders profit because the poorer you are, the greater your need to use the lenders on the fringe charging extreme interest rates.”

“These lenders need to be stopped from preying on the poorest and from charging extortionate interest rates – in many cases, hundreds of percent per annum.”

Andrew Casidy said that most interested parties have repeatedly asked Government to limit the interest rates these lenders can charge by law. Many other countries have interest rate caps that work well.

“Any Government with a shred of common sense and a concern for our poorest citizens would set a maximum legal interest rate rather than trying to defend several hundred percent interest rates as acceptable.”

“You can’t be a responsible lender and charge this level of interest. It should not be legal in New Zealand.”

FIRST Union’s Fono has been campaigning for better laws protecting people against loan sharks for the past two years.

“Fringe lenders who are taking advantage of low income vulnerable pacific families and others need to be stopped. These sharks are creating poverty, are hurting families and need to be reigned in,” said Terry Tuiletufuga, Co Convenor of FIRST Union Fono.

The National Distribution Union and Finsec joined forces in October 2011 to form New Zealand’s newest union – FIRST. The union represents over 27,000 people working in Finance, Industrial (Textile and Wood) Retail, Stores & Transport. http://firstunion.org.nz

ENDS

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