Regulation of loan sharks and the interest rates they charge are the focus of a new member's bill about to be put into Parliament's ballot by Labour MP Charles Chauvel.
The Credit Reforms (Responsible Lending) Bill proposes the Reserve Bank governor would set the maximum interest rate lenders could charge, while lenders would be required to assess the borrower's ability to repay the loan.
If a lender failed to assess repayment and the borrower was unable to repay the loan plus interest, under the bill they would only need to repay the amount of the original loan.
Mr Chauvel said the bill focused on low income earners who were being preyed on by those in the finance lending industry - borrowers who would use a stereo or weedwhacker as collateral for a loan to get them through to payday, and would then lose the item when they were unable to pay interest.
People were paying exorbitant interest on their loans, with compounding interest of 8 percent per week adding up to 2,000 percent per annum, he said.
Mr Chauvel said the bill currently had the support of Labour, the Maori Party, Green Party and Progressives, but the National and ACT Party response had been "lukewarm".
He said he was meeting next week with a government backbencher who he hoped would help find support for the bill within Cabinet, and he hoped the Government might adopt the bill which would speed up its progress into the debating chamber.
His bill would be introduced into the ballot for members' bills next Thursday if possible, otherwise it would have to wait until early June for a members' day.
Members' bills are drawn at random from the ballot, meaning it could take days or years to be drawn and tabled before Parliament for debating.
NZPA