New Zealand Consumer Finance Law Change: Impact on ANZ and ASB

Major changes to New Zealand’s consumer finance regulations are reshaping how banks like ANZ and ASB approach lending. The Credit Contracts and Consumer Finance Act amendments, finalized in mid-2024, represent the most significant shift in responsible lending rules since stricter requirements were introduced in 2021. These reforms aim to reduce compliance burdens on lenders while maintaining protections for borrowers.

The changes followed sustained pressure from the banking sector, which reported that prescriptive affordability checks led to longer application processing times, higher rejection rates, and increased operational costs. As the reform landscape continues to evolve, both ANZ and ASB have had to adapt their lending practices while navigating related legal challenges.

What the CCCFA Changes Mean for New Zealand Borrowers

Key Takeaways from the 2024 Reforms

• The government scrapped prescriptive affordability tests in favor of principles-based guidance for lenders
• Banks welcomed the increased flexibility while maintaining core consumer protection obligations
• The Responsible Lending Code was updated to focus on essential expenses rather than discretionary spending
• Personal liability provisions for directors and senior managers were removed from the framework
• Regulatory oversight transferred from the Commerce Commission to the Financial Markets Authority
• Application processing times are expected to decrease compared to the post-2021 period

Snapshot of Key Facts

How the Changes Affect ASB Customers

ASB has had to address past compliance failures while adapting to the new regulatory environment. The bank admitted responsible lending failures and agreed to pay affected customers $8.1 million following Commerce Commission action. This settlement related to practices that occurred before the 2024 reforms simplified the compliance landscape.

Under the updated framework, ASB customers may experience a more streamlined application process. The shift away from prescriptive affordability calculations toward principles-based assessment means lenders can exercise greater judgment in evaluating borrower circumstances. However, essential expense verification remains a requirement.

Moving Forward Under New Rules

The Reformed Responsible Lending Code now emphasizes that lenders should focus on essential expenses only, such as housing costs and utility bills. Discretionary spending categories, including takeaways, entertainment, and holiday costs, are no longer subject to the same level of scrutiny. This distinction provides borrowers with more flexibility while giving lenders clearer guidance on reasonable inquiry requirements.

ANZ’s Response to Consumer Finance Law Changes

ANZ has responded to the reforms with a mixed posture. The bank broadly supported the 2024 simplifications that reduced compliance friction, but expressed significant concern about elements not addressed in the amendments. Specifically, ANZ noted disappointment that the 2025 CCCFA Amendment Bill excluded its ongoing court case related to disclosure practices between 2015 and 2019.

The bank has argued that one interpretation of the law could require full refunds of fees and interest for minor disclosure errors during that period. ANZ has advocated for equal treatment across the sector and has called for judicial discretion in determining appropriate remedies. The bank maintains that outcomes should be fair rather than producing windfall reimbursements for errors that did not materially harm customers.

Industry Concerns and NZBA Position

The New Zealand Bankers’ Association submitted comments supporting broader amendments to address multiple concerns. The NZBA advocated for resolving refund risks, facilitating the transition to licensing, removing due diligence duties for executives, and affirming court discretion in remedy determinations. The association cited systemic risks to lenders and depositors if certain interpretive uncertainties remain unresolved.

Treasury documents reference class action risks for ANZ and ASB, with potential secondary impacts on other banks. These documents suggest that the resolution of current litigation could set precedents affecting the entire banking sector. The uncertainty around potential refund liabilities has been a factor in banks’ strategic planning and reserves allocation.

Timeline of Consumer Finance Law Changes

1. Pre-2021: Original CCCFA framework with general responsible lending obligations
2. 2021: Stricter prescriptive affordability assessment regulations introduced
3. April 2024: Phase 1 reforms exempt insulation loans and car dealers from CCCFA requirements
4. July 2024: Key provisions take effect: prescriptive affordability rules revoked; Responsible Lending Code updated to essential expenses focus; personal liability provisions removed for directors and senior managers
5. September 2024: Buy Now Pay Later services declared consumer credit contracts with conditional exemptions
6. 2025: CCCFA Amendment Bill introduced addressing additional concerns including bank refund risks

What Remains Confirmed Versus Uncertain

Background and Context of the Reforms

The 2024 CCCFA amendments represent a course correction following industry feedback about rules introduced since 2021. Lenders reported that prescriptive requirements created bottlenecks in application processing, contributed to higher decline rates for borderline cases, and increased compliance costs that were ultimately passed on to consumers.

The reform approach shifted from specifying exactly how lenders must verify affordability to establishing principles that lenders must follow when making reasonable inquiries. This principles-based framework gives financial institutions more latitude to develop assessment methods suited to their products and customer bases.

Consumer advocates have noted that core protections remain in place. Lenders still must assess affordability and cannot engage in reckless lending. The changes primarily affect how thoroughly discretionary expenses must be documented, not whether affordability assessment occurs at all.

Official Sources and Statements

The Credit Contracts and Consumer Finance Act has been reformed to reduce compliance costs for lenders while maintaining essential protections for consumers. The shift to a principles-based framework reflects feedback from across the financial services sector.

— MBIE, 2024 Financial Services Reforms documentation

We are pleased the law is being changed to provide certainty going forward, but disappointed our case is not included alongside similar matters already resolved. Fair outcomes for customers remain our priority.

— ANZ New Zealand, October 2025 statement

Summary and Next Steps

The CCCFA amendments of 2024 marked a substantial shift in New Zealand’s consumer finance landscape. Banks including ANZ and ASB have gained greater flexibility in lending assessments, though the full implications continue to unfold as related legal matters progress. Consumers who were declined under previous stricter rules may find different outcomes under the updated framework. Those with existing loans or savings products should monitor communications from their banks as lending practices continue to evolve.

For those exploring deposit options, understanding how interest rates work alongside borrowing changes can help inform broader financial planning. ANZ Savings Interest Rates and term deposit products may be worth reviewing in context of the changing lending environment.