Changes to Consumer Lending 2021

There has been an update to legislation which changes how we can lend you money. It's to help protect you against unaffordable debt.

First Credit Union needs to be sure that any loan we give is suitable for you, and that you can easily repay it.

The main changes you might notice are:

• It may take longer when you apply for a loan, because we need to take extra steps to make sure you are able to easily repay a loan.

• It might be harder to get a loan because the extra information you need to provide us might show you can't easily repay the loan.

These changes affect ALL consumer lending: Small loans, big loans, new loans, additional loans and all credit applications. 

Why will a loan application take longer?

To appropriately assess your loan application, you will need to provide more information. We can no longer just rely on what you provide us and will need to collect extra information from you and check that the information provided is correct, such as: income, debts and expenses.

If you aren't a member of First Credit Union, or don't have all your pay coming into an account with us, we will need to see your last 3 month's bank statements/transaction history. This allows us to check your income, debts and expenses.

Responsible lending

First Credit Union helps everyday Kiwis achieve their financial goals within their means.

You may find that loans that were previously deemed "responsible" will no longer be approved under these changes due to:

• the more detailed information you give us shows that you can less easily repay the loan; or

• your financial situation under the new requirements shows that there isn't a reasonable surplus or buffer when we check if you can repay

If your loan is declined, it is because we believe it would not be responsible of First Credit Union to approve it.

The debt may not be suitable for you, or you may not be able to repay it.

Information supplied by Financial Services Federation in association with the Bankers Association.