On 1 July 2026, regulatory responsibility for the Credit Contracts and Consumer Finance Act 2003 (CCCFA) was transferred from the Commerce Commission to the Financial Markets Authority.

This marked the end of over 20 years of consumer credit regulatory enforcement by the Commerce Commission. The 21-year period saw significant changes in this space with the introduction of the lender responsibility principles, sharp increases in the level of enforcement activity, and new and more severe penalties being imposed on non-compliant lenders.

Sam Comber, Senior Associate, was interviewed by BusinessDesk, read the article here [paywall].

2005 to 2015: the calm before the storm

The early days of the CCCFA from 2005 to 2015 were a comparatively quiet time in the consumer lending space. There were no significant reforms and the Commerce Commission only concluded around 30 pieces of enforcement action, which included warning letters, out-of-court settlements and court proceedings.

This enforcement activity focused on the failure to provide borrowers with key disclosure information about their loans, and the charging of unreasonable fees. Fines were imposed on non-compliant lenders and generally ranged from $1,500 to $77,000. While refunds were also obtained for affected borrowers, these were usually in the tens or hundreds of thousands with the largest refund being $700,000 in February 2010.

2015 to 2026: the regulatory response to irresponsible lending

The subsequent ten years saw an unusually high number of amendments being made to the CCCFA. Two of the most significant were the introduction of the lender responsibility principles in 2015, and increased pecuniary penalties for breaches of the CCCFA in 2019.

These changes were a response to growing evidence of certain lenders engaging in unacceptable lending practices. Instead of just ensuring that borrowers were provided with all the relevant information and then letting them decide whether they wanted the loan, the CCCFA was amended to require lenders to undertake a preliminary assessment of whether a loan was both suitable and affordable to the borrower before agreeing to provide credit. Lenders were also required to exercise the “care, diligence, and skill of a responsible lender” when engaging with borrowers.

The Commerce Commission also responded by significantly increasing its CCCFA enforcement activity. The next ten years saw the Commerce Commission bring 110 enforcement actions, many of which targeted irresponsible lending practices by mobile traders and high-cost payday loan companies.

Remediation provided to affected customers routinely reached millions, and in some cases tens of millions, of dollars with the highest remediation in one case totalling over $35 million. The fines and penalties imposed on lenders also significantly increased with the largest penalties exceeding $2 million in each of 2024, 2025 and 2026.

What’s next: transfer to the Financial Markets Authority

Regulatory responsibility for the CCCFA has recently passed to the FMA. This means the FMA has primary regulatory and enforcement responsibility for all financial markets, including consumer credit.

The intention behind the transfer was to simplify and streamline the regulatory environment and reduce duplication. The transfer is also intended to provide stronger and more consistent consumer protection outcomes with the FMA being given new powers to:

• issue stop orders to prohibit the supply of services or the distribution of information where the FMA considers the CCCFA has been breached (or is likely to be breached), or where the FMA considers that a communication is false or misleading;

• issue direction orders requiring lenders to take steps to avoid or mitigate the adverse effects of a breach;

• accept enforceable undertakings to pay the FMA an amount in lieu of a pecuniary penalty; and

• conduct on-site inspections without notice.

The FMA has committed to taking a risk-based approach to its CCCFA enforcement and to work with industry and consumer groups. The FMA’s broad suite of supervisory and enforcement tools will enable proactive oversight of lending practices and strengthen the regulator’s ability to respond to misconduct that may harm consumers.

Litigation will be reserved for the most serious misconduct where consumer harm has occurred and will remain an essential part of the regulator’s toolkit. We do not expect CCCFA enforcement activity to slow down any time soon, given the FMA has inherited all active CCCFA investigations and proceedings that were ongoing as at 1 July 2026.

One of these active proceedings concerns alleged breaches of the lender responsibility principles by motor vehicle lender, Go Car Finance Limited. That proceeding is currently being heard in the Auckland High Court and will be the first time the lender responsibility principles have been tested in a fully defended hearing before the Court.

With motor vehicle lending being a priority area for the FMA, the case should provide useful guidance on the requirements of lender responsibility principles and how these operate in practice.

Get in touch

If you have any questions about CCCFA compliance, or how the recent changes in the consumer credit space may affect you, please get in touch with one of our experts.