Labour list MP Carol Beaumont is urging fellow MPs to support her private members bill aimed at preventing money lenders, or "loan sharks", from charging excessive interest rates and lending money in an irresponsible manner when it has its first reading in Parliament tonight.
Beaumont says she has received an overwhelmingly positive response from people who think it's time something was done to regulate "wily" money lenders. She says many of these "predatory lenders" target Maori and Pacific Island communities as well as students.
"Many shared personal stories of how they and their families were adversely affected by loan sharks charging excessive interest rates on their loan,“ Beaumont says.
"Many loan sharks lend out money at obscene rates, without checking to see whether the borrower will be able to meet the repayment requirements," adds Beaumont.
"In some cases people are borrowing to pay off interest and then incurring much higher interest as a result, leaving them in more trouble than they were in the first place. For those unfortunate enough to be trapped in this ever restricting spiral of debt, the consequences can be severe."
This, Beaumont says, is unacceptable behaviour and it's time for action.
"The community wants Parliament to show leadership on this issue and join together to deal with this issue which is causing real hardship to families in already tough economic times.I realise my private members bill is a necessary but not a complete fix. But it is a start."
“I am asking all political parties to support this bill to select committee where it can be considered in full. Sadly National and Act seem positioned to vote against my Bill. I was appalled to discover recently that an area of Government work which could have helped with the problems created by Loan Sharks, the review of the Credit Contracts and Consumer Finance Act has been deprioritised with no outcomes until mid next year."
“I believe to do nothing would be irresponsible and a failure in the eyes of our communities. Whatever happens to the Bill I am committed to working with the community to continue my campaign to stop loan sharks and to hold the government accountable for their inaction on this issue,” Beaumont says.
The National and Act parties won't be supporting Beaumont's Credit Reform (Responsible Lending) Bill. However, finance sector workers union Finsec has thrown its support behind the bill and says National MPs should vote for the Bill to be sent to a Parliamentary select committee.
“The measures proposed in the Bill are reasonable and normal. Japan and many countries in Europe, Africa and South America have interest rate restrictions already. Caps are either being implemented or proposed in most of Australia, Canada, the USA and UK,” says Finsec general secretary Andrew Casidy.
Denying a select committee hearing on the issues would only mean "outrageous loan shark lending practices" will continue.
“The measures proposed in the Bill are reasonable and normal. Japan and many countries in Europe, Africa and South America have interest rate restrictions already. Caps are either being implemented or proposed in most of Australia, Canada, the USA and UK,” says Casidy.
“National MPs need to stand up for vulnerable low-income borrowers for once."