The Government has announced tweaks to the responsible lending rules less than four months after the Credit Contracts and Consumer Finance Act was tightened. 

Changes to the law came into force on December 1 prompting complaints from consumers and mortgage brokers frustrated that borrowers were being turned down for loans due to spending habits like takeaways, going to the pub or seeing a counsellor. 

More than 10,000 people signed a petition against the law changes and the Government announced at the end of January it would review them. 

Today Commerce and Consumer Affairs Minister David Clark said it was making practical amendments to curb any unintended consequences of the Act. 

"The amendments we are making are informed by the feedback I received from banks, other lenders and consumers and sit comfortably within the intent of the Act. 

"These initial changes ensure borrower-ready Kiwis can still access credit while we continue to protect those most at risk from predatory and irresponsible lending. 

"There is no question that the banks, budget advisers and Government are all on the same page when it comes to supporting the intention of the law – we want to stop vulnerable people from finding themselves with unaffordable debt." 

The changes include; 

• clarifying that when borrowers provide detailed breakdown of future living expenses there is no need to inquire into current living expenses from recent bank transactions.
• Removal of regular "savings" and "investments" as examples of outgoings that lenders need to inquire into
• Clarifying that the requirement to obtain information in "sufficient detail" only relates to information provided by borrowers directly rather than relating to information from bank transaction records.
• Providing alternative guidance and examples for when it is "obvious" that a loan is affordable

Clark said a broader investigation led by the Ministry of Business, Innovation and Employment and the Council of Financial Regulators into the CCFA amendments was ongoing. 

But he said investigations had so far given no reasons to believe the act was the main driver in reduced lending. 

"The Reserve Bank's December figures highlight seasonal variation as a prominent contributor. In fact, December 2021 was still above trends from the same month in 2017, 2018 and 2019. 

"It is also important to note that banks may be managing their lending more conservatively and this is likely due to global economic conditions. And that a number of factors affecting the market have occurred at the same time as the CCCFA changes, including increases to the OCR, LVR changes and an increase in house prices and local government rates." 

That is despite lenders saying the CCCFA has curbed its application and approval rates. 

Last month Heartland Bank chief executive Chris Flood told the Herald the decline rate for its vehicle lending had tripled since the Government tightened consumer credit laws. 

Kiwibank chief executive Steve Jurkovich said mortgage applications had "fallen sharply" in the wake of the law change. 

Clark said today's changes were not the final word on the law. 

"Any further changes to credit laws and the Responsible Lending Code will be considered as part of the remainder of the investigation which is due next month."