MBIE is seeking submissions on whether to reissue the Addendum to the Responsible Lending Code, which elaborates on and offers guidance on how lender responsibility principles and lender responsibilities may be implemented by lenders while dealing with borrowers who have been impacted by COVID-19.
In recent weeks, lenders have been dealing with increased numbers of borrowers who have been experiencing financial stress as a result of COVID‐19. Some borrowers have been seeking variations to consumer credit contracts (e.g. mortgages and personal loans) to provide them with relief. Common means of relief include reducing current repayments by extending loan terms, changing the type of repayments (e.g. interest only payments), or temporarily deferring repayments.
The purpose of the addendum to the Responsible Lending Code is to elaborate on and offer guidance on how lender responsibility principles may be implemented by lenders while dealing with borrowers who have been impacted by COVID‐19. This includes situations where an existing consumer credit contract is varied or replaced for the purpose of reducing a borrower’s financial difficulties brought on by the economic or health impacts of COVID-19.
The previous version of the addendum expired on 31 March 2021.
In light of economic uncertainty caused by the recent COVID-19 Delta outbreak, borrowers may require assistance. MBIE is therefore inviting submissions on whether the Addendum to the Responsible Lending Code should be reinstated to facilitate lenders' ability to offer loan repayment deferrals and other credit contract variations to borrowers impacted by COVID-19.
1. Should the Addendum to the Responsible Lending Code: COVID-19 be reinstated?
2. If the Addendum were reinstated, should any changes be made?
You can find out more about the addendum and how to submit here.
This consultation will close on 21 September 2021 at 5pm.
We hope to hear your feedback on whether we should reissue the addendum, and whether any further changes should be made to the addendum. Information on the wider Consumer Credit Law changes is available here.