Law makers tread a tricky tightrope when it comes to getting money-lending rules right.
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The Credit Contracts and Consumer Finance Act is a mouthful of a law that has far-reaching effects for would-be borrowers.
Make it too easy to get cash and vulnerable people end up in debt.
Make it too hard and potential home buyers become perpetual renters.
In yet another shakeup by the new government, the rules are changing again.
The Detail today talks to a property investment firm and a social service organisation to get their views on where the laws should sit, and the dangers of swinging too far one way or the other.
Ed McKnight is an economist at Opes Partners, a property investment firm, and co-hosts The Property Academy Podcast.
"What this [CCCFA] law is all about is making sure that people who go to get out a loan, whether that's a mortgage or a personal loan, whatever it happens to be, that they can actually afford it," McKnight says.
"If you're a lender and you're giving somebody some money that they then have to pay back, you're in a bit of a position of power. So it's all about making sure people who are lending out money are treating borrowers fairly."
The previous Labour government brought in various changes to try to protect borrowers - but some of these got a lot of criticism.
"The rules became really prescriptive," McKnight says.
"It said to all types of lenders, not just pay-day lenders but even the banks - and that's really where the issue [was] - 'this is how you must assess somebody's mortgage'."
McKnight talks about some of the rules lenders had to follow - such as counting gym memberships, tithing and even savings as ongoing expenses. If you spent too much you simply wouldn't get a loan.
"That's where it started to get a little bit silly, I think, and why they made changes quite quickly - only four months after they released the first version."
The changes included removing discretionary expenses from affordability testing.
But National's coalition agreement with Act states the government will "rewrite the Credit Contracts and Consumer Finance Act 2003 to protect vulnerable consumers without unnecessarily limiting access to credit".
Commerce and Consumer Affairs minister Andrew Bayly is leading the charge. But what exactly these changes will be is unclear.
"The only detail we've really got is a speech given to the Financial Services Council," McKnight says.
"The big change that Andrew Bayly is saying he wants to make to the CCCFA is he wants to look at the penalty regime - so if you screw up, Mr Banker, how much do we charge you?
"One of the really big issues with Labour's changes was the penalties were pretty severe."
Bayly is also talking about removing the "prescriptive affordability requirements for lower risk lending," but there's not much detail yet on the specific changes - that's expected in the coming months.
But will this just bring back powerful high-risk high-interest lenders?
"The devil will be in the detail," McKnight believes.
"Hopefully we don't see them come back... there is always a risk that if you loosen the rules there may be some bad actors who find clever ways to circumvent the rules."
The Detail also talks to Ian Hutson, The Salvation Army's social policy and parliamentary unit director, who meets lots of people who slip through the cracks and into financial hardship.
Its recent State of the Nation report found some startling information - such as KiwiSaver withdrawals for financial hardship increased by 42 percent in the last year - the highest level to date.
In 2023 non-banking lending institutions provided 45.5 percent of personal consumer lending - notably higher than their 31 percent share a decade ago.
"Often those non-bank lenders don't have the same regulatory rigour on them around checking that people have got the money," Hutson says.
"Those are the areas where we often end up with people who come through our financial mentoring programme, where they have to try to help them work their way out of debt."
He's calling for the government to wait to get a "good grasp" on how things are working now before rushing into creating new laws.
"Regulations without taking time to think through could have significant consequences... there's obviously some red tape - more than is needed - but what we're worried about is that they will take away the protections completely from the people that we work with.
"It's honestly distressing to watch what happens to people."
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