Code of Responsible Borrowing now released
In 2014 Government passed new legislation regarding lending and borrowing. Part of this legislation required the creation of the Code of Responsible Lending — the document that details how a lender knows that they’re lending responsibly. The Code has been created – New Zealand Federation of Family Budgeting Services was represented on the development committee – and comes into force on 6th June.
At the end of May – just before the Code of Responsible Lending comes into force – NZFBS released a matching Code of Responsible Borrowing. There are two parts to a successful loan – the lender and the borrower. There are responsibilities on both sides. The new legislation regulates the lenders really well… but what about the borrower? The Code of Responsible Borrowing covers the other part of the equation – the borrower. It asks the borrower to do their homework before they sign a loan or credit contract, to make sure they know what they can afford, have looked at all their options and provided full information to the lender.
NZFBS created the Code in association with the Financial Services Federation, known as the FSF. The FSF is a national body — their members are money lenders. They are totally in support of responsible lending and saw our Code of Responsible Borrowing as a natural partner.
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