Government 'suffocating' peer-to-peer

National and NZ First have blocked Act leader David Seymour’s attempt to add a definition of a credit fee to the Credit Contracts and Consumer Finance Act.

He objects to peer-to-peer lenders being subject to the requirement that lenders' fees are proportionate to their costs in adminstering a loan.

Seymour produced a supplementary order paper to amend the CCCFA.

Peer-to-peer lender Harmoney is involved in a court case brought by the Commerce Commission over its platform fees, which used to be a percentage of the loan amount.

Seymour said National was suffocating the new peer-to-peer lending industry.

“P2P companies like Harmoney and PledgeMe are very different to regular lenders, because they don’t actually lend any money,” he said.

“They simply facilitate lending between consenting individuals, cutting out the middleman. They make their money from lender and platform fees instead of interest rates. So why are P2P lenders being made to collect fees in the same way as traditional lenders?

“This has come from rules established in 2003, when no one could even imagine a P2P lending platform. It’s a classic case of archaic red tape suffocating innovation."

The Commerce Commission filed civil proceedings asking for clarification on how the CCCFA applied to Harmoney. 

The Commission’s view is that the platform fee is a credit fee under the Act, and that Harmoney is a creditor. Harmoney says it is not a creditor, and that the fee is the revenue it earns for running its loans marketplace.

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