When finance laws will change

Some credit law changes take effect on June 17. These include power of attorney or agency clauses no longer being used to add security over goods bought later. A change to the Personal Property Securities Act means creditors won’t be able to use such clauses in contracts to allow them to add other consumer goods as security after an agreement has been signed. Some key consumer credit law changes will take effect by June 17, 2015. These include the new lender responsibility principles supported by a responsible lending code being drawn up by the government. RELATED:  Loan-shark law principles in plain English New lender responsibility principlesunder the Credit Contracts and Consumer Finance Act will be supported by a responsible lending code. Lenders will need to disclose key information about the terms of credit agreements before they are signed, while standard form contract terms, interest rates and fees must be made publicly available and free of charge. The cooling-off period for borrowers under contracts will extend from three to five working days. The Credit (Repossession) Act will be repealed. Rules governing when, how and what can be repossessed will be included in the Credit Contracts and Consumer Finance Act. Only licensed agents will be allowed to carry out repossessions. Rules about the type and the amount of fees and charges included in contracts will be tightened. The main test is whether the fees reasonably compensate for costs or losses incurred. The rights and responsibilities of both parties when a borrower makes an unforeseen hardship application will be clearer. Providers will need to comply with lender responsibility principles when assessing applications and provide written reasons for declining applications. The matters courts and disputes tribunals must consider in deciding if contracts or conduct is oppressive will be more consumer-focused. New factors will include the relative bargaining power of parties and actual circumstances in which the borrower entered into the contract. Maximum penalties for offences under the Credit Contracts and Consumer Finance Act will align with those under the Fair Trading Act – $200,000 for individuals and $600,000 for companies.