Limit raised on 'moneylenders’

Press, 1 August 1977, Page 12

Limit raised on 'moneylenders’

PA Wellington People lending money at an interest rate of 15 per cent or less will not be known as moneylenders under legislation introduced in Parliament by the Minister of Justice (Mr Thomson). At present persons lending at a rate of interest of 10 per cent or less are excluded from the definition of the term "moneylender.” Mr Thomson said the Moneylenders Amendment Bill would implement a Budgetary provision amending the Moneylenders Act, 1908. The bill was an interim measure, he said.

The Government hoped to introduce a Credits Contracts Bill later this year for study during the Parliamentary recess. The Opposition finance spokesman, Mr Tizard, described the measure as “an abject confession of failure” of the Government’s economic policy. The interest rates on long-term mortgage loans were rising, so was the 15 per cent limit high enough? he asked. The Prime Minister (Mr Muldoon) said he wanted to lessen restraints on

mortgage lending which was being inhibited by the "archaic” Moneylenders Act and' its 10 per cent limit. The law was unclear about when lenders came under the act, and this was stopping some potential mortgage lenders making their money available.

Mr Muldoon said the bill was an interim measure until a Credit Contracts Bill was introduced later this session.

The Leader of the Opposition (Mr Rowling) described the bill as "just another sellout to the moneylenders.” He said three out of 10 mortgages were already over 12 per cent, and 53 per cent of mortgages were over 10 per cent. Mr D. R. Lange (Lab., Mangere) said the bill protected those who gathered money from other sources and lent out at high interest rates. He agreed the Moneylenders Act had created difficulties but said the bill did not tackle the issues involved.

"No honest person needs to fear the Moneylenders Act,” he said. The bill was introduced after a division which the Government won, 41-28.