This note is not part of the regulations, but is intended to indicate their general effect.
The exemptions apply to persons who are in the business of providing a financial service of being a creditor under a consumer credit contract in cases where they become a creditor as a result of transfers to them of rights of existing creditors. The exemptions are related to the coming into force on 6 June 2015 of section 7 of the Financial Service Providers (Registration and Dispute Resolution) Amendment Act 2014 that extends the scope of the 2008 Act to cover persons who become creditors under credit contracts by reason only of transfers of rights.
The exemptions are tied to the circumstances prescribed for the purposes of section 26A(3) of the Credit Contracts and Consumer Finance Act 2003 by regulations 19 and 20 of the Credit Contracts and Consumer Finance Regulations 2004 (as inserted by regulation 4 of the Credit Contracts and Consumer Finance Amendment Regulations (No 2) 2015).
In broad terms, an exemption is given to a person (the new creditor) in respect of providing a financial service of being a creditor under a consumer credit contract in cases where—
the new creditor becomes a creditor under the contract by reason only of a transfer of rights of an existing creditor; and
the transfer is made for the purposes of securitisation or covered bond arrangements or similar arrangements; and
after the transfer, the contract will be managed by another person (the contract manager) who is registered under Part 2 of the 2008 Act and is a member of an approved dispute resolution scheme under Part 3 of that Act; and
the contract manager is a creditor under the contract or, if that is not the case, the rules of the contract manager’s approved dispute resolution scheme apply in relation to the contract manager as if the contract manager were the creditor under the contract.
In broad terms, the new creditor’s exemption in respect of a contract (the relevant contract) will end in the following circumstances:
rights or duties of the new creditor are exercised or performed, or a debtor or guarantor is contacted in relation to the exercise or performance of such rights or duties, otherwise than by or through the contract manager. For example, the exemption may end if the new creditor exercises or performs rights or duties, or contacts a debtor or guarantor, without involving the contract manager or arranges for a third party to do so without involving the contract manager. Contact with a debtor or guarantor by a person other than the contract manager may be regarded as contact through the contract manager if the contact is arranged by the contract manager:
the management contract under which the contract manager is managing the relevant contract ends:
the contract manager ceases to be registered or to be a member of an approved dispute resolution scheme:
the contract manager does not comply with the rules of the contract manager’s approved dispute resolution scheme or a complaint in connection with the relevant contract cannot otherwise be resolved under an approved dispute resolution scheme because the new creditor is not a member of any such scheme.
However, there is a special rule limiting these circumstances if the new creditor transfers all of the new creditor’s rights under the relevant contract to another person.
There are special transitional provisions for cases involving transfers of rights that occur before 6 June 2015.
Regulatory impact statement
The Ministry of Business, Innovation, and Employment produced a regulatory impact statement on 7 April 2015 to help inform the decisions taken by the Government relating to the contents of this instrument.
A copy of this regulatory impact statement can be found at—
Date of notification in Gazette: 7 May 2015.
These regulations are administered by the Ministry of Business, Innovation, and Employment.