Fri, 21 Aug 2009 12:00a.m.
New Zealand is one of the few countries left that does not have loan shark laws in place
Parliament is to consider setting a maximum interest rate that loan sharks can charge.
Labour MP Charles Chauvel's Credit Reforms (Responsible Lending) Bill proposes capping the interest rate lenders can charge under a consumer credit contract at 48 percent.
It would also render a contract unlawful if a lender reasonably believes the borrower will not be able to repay the loan and limits the amount a creditor can recover from a debtor.
Mr Chauvel said the bill was seeking to curb the actions of loan sharks who charge excessive interest rates.
"Payday loans from loan sharks at 2000 percent a year are a disgrace and New Zealand is one of the few countries left that does not have laws in place to deal with them," he said.
The bill was drawn out of a ballot for laws proposed by backbencher and opposition MPs.
These bills usually make slow or no progress through Parliament as they are only dealt with in a specified fortnightly session.
Under the current composition of Parliament members' bills need the support of National or every other party in Parliament to even make it past their first vote.
Mr Chauvel's bill was one of three drawn for consideration yesterday to fill vacant slots.
The others were ACT MP Sir Roger Douglas's bill proposing the scrapping of compulsory student union membership and Green MP Kennedy Graham's Climate Change (Government Vehicle Procurement) Bill.
If Mr Graham's bill became law it would stop the state from buying cars with an engine size greater than 1800cc.
There would be exemptions for emergency vehicles and other essential transportation.
The bill's summary said it was intended to get the Government to show leadership in reducing vehicle emissions.
NZPA
