Canterbury quietly pauses council loan scheme after Auckland forced to pay ratepayers $10mson dakika haberler

ALDEN WILLIAMS/Stuff An ECan loan was meant to support property owners in installing insulation, heating, and making other healthy home improvements. The Canterbury Regional Council has quietly paused a loan scheme after a similar Auckland one resulted in...

Canterbury quietly pauses council loan scheme after Auckland forced to pay ratepayers $10mson dakika haberler

ALDEN WILLIAMS/Stuff An ECan loan was meant to support property owners in installing insulation, heating, and making other healthy home improvements. The Canterbury Regional Council has quietly paused a loan scheme after a similar Auckland one resulted in...

Canterbury quietly pauses council loan scheme after Auckland forced to pay ratepayers $10mson dakika haberler
27 Mayıs 2022 - 08:00

Sondakika haberleri

An ECan loan was meant to support property owners in installing insulation, heating, and making other healthy home improvements.
ALDEN WILLIAMS/Stuff
An ECan loan was meant to support property owners in installing insulation, heating, and making other healthy home improvements.

The Canterbury Regional Council has quietly paused a loan scheme after a similar Auckland one resulted in a $10 million payout to ratepayers.

Up until late 2021, Environment Canterbury, or ECan, was offering ratepayers a loan of up to $6000 for healthy homes improvements, such as installing insulation and heating, but aspects of the loan may be in breach of the law.

Around $4m had been distributed between 1400 property owners in Canterbury since the scheme launched in 2018, according to ECan director of strategy and planning Katherine Trought.

The scheme had an interest rate of 5.9% to be paid over nine years. All repayments were made through residents’ rate bills.

Auckland Council was warned in February last year their scheme potentially broke the Credit Contracts and Consumer Finance Act. ECan paused their scheme in December to make sure they wouldn’t be breaking the same rules.

Trought said the act was a complex piece of legislation, “especially here where it is also tied into our powers to levy rates”.

RYAN ANDERSON
Independent Economist Tony Alexander says mortgage lenders' willingness to lend has dropped.

An update to ECan’s website on December 14 said the council’s review of the scheme was “well under way, with much of the initial work done”, but it was still in progress on Friday.

Part of the act Auckland was potentially in breach of was regarding credit checks and other obligations. The onus was on lenders to ensure people who took on debt were in a financially secure enough position to meet repayments.

“This went unchecked for a number of years,” Commission Chair, Anna Rawlings, said at the time.

Ecan tested applicants repayment ability based on their history of rates payments, but Trought said there were other tests.

“The scheme was also geared to keep repayments low, and participants in the Healthier Homes scheme are able to space out their repayments over time – up to nine years – in order to minimise financial pressure,” she said.

Environment Canterbury director of strategy and planning, Katherine Trought, left, with former Environment Canterbury Commissioner David Bedford.
Stacy Squires/Stuff
Environment Canterbury director of strategy and planning, Katherine Trought, left, with former Environment Canterbury Commissioner David Bedford.

The Commerce Commission can only issue warnings – penalties were issued by the courts. Regardless, after being warned, Auckland paid $10m to ratepayers who’d paid interest or incurred penalties over missed payments.

Trought said in Canterbury, “very few” people did not meet their repayments. She did not give an exact number, but said it was a “fraction of a percentage” of the approximately 1400 people who borrowed money.

The late payment penalty is 10% of the overdue amount, she said.

Over 2021 there was an 11% increase on housing debt, economist Cameron Bagrie said in February.

He said the growth was abnormal, but increased lending restrictions imposed by the CCCFA in December was stopping people from buying homes.

Fear of breaking the new rules may be causing banks and lenders to become “ultra conservative” in who could and couldn’t be lent money, prompting an inquiry by Commerce and Consumer Affairs Minister David Clark just a month later.

Stuff

Bu haber 51 defa okunmuştur.

YORUMLAR

  • 0 Yorum
Günün Başlıkları