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New regulation provides COVID-19 exemptions from credit contracts

01 April 2020

The Credit Contracts and Consumer Finance (Exemptions for COVID-19) Amendment Regulations 2020 came into force on 1 April 2020.

The regulations amend the Credit Contracts and Consumer Finance Regulations 2004. and provide exemptions from certain requirements of the Credit Contracts and Consumer Finance Act 2003 where the borrower has been impacted by the effects of COVID-19.

The exemptions facilitate the recently announced six-month mortgage repayment deferral scheme and relief from other household borrowing from registered banks.

The exemptions apply if a registered bank is the creditor (or the contract manager, in the case of securitisations, etc) and if the borrower is experiencing, or reasonably expects to experience, financial difficulties due to the economic or health effects of COVID-19. The exemptions facilitate variations of existing contracts, and entry into replacement contracts, for the purpose of reducing those difficulties.

The exemptions are from the provisions listed in new regulation 18D(2) and apply subject to the conditions set out in new regulation 18D(3) ahd (4).

Last updated on the 1st April 2020