Supplementary Order Paper No 445

New clause 22B

After clause 22A (page 41, after line 21), insert:

22B New section 37A inserted (Limit on annual interest rate or rates)
  • After section 37, insert:

    37A Limit on annual interest rate or rates
    • (1) This section applies if interest charges are or may be payable under a consumer credit contract.

      (2) The Minister may determine and publish a maximum interest rate that may be contained in a consumer credit contract, in the manner set out in section 9E as if the maximum interest rate were a Responsible Lending Code.

      (3) A consumer credit contract must not contain an interest rate that exceeds the maximum established under subsection (2).

      (4)  If the court is satisfied, on the application of the Commission, a debtor, or a guarantor, that an interest rate exceeds the maximum established under subsection (2), it may order that the rate be reduced to the maximum interest rate, or such lower rate as the court thinks appropriate in the circumstances.

      (5) The court may make any other order it thinks fit for the purpose of giving effect to an order under subsection (4).