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Nick McBride - NZ

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					                            Consumer Credit Regulation


                                    Nick McBride
                                   Senior Advisor
                           Ministry of Consumer Affairs
                                     Wellington
                                    New Zealand
                         E-mail: nick.mcbride@mca.govt.nz




Introduction

Contracts for consumer credit are the most complex of and potentially risky
transactions that consumers enter into, both because of informational disadvantages
faced by consumers and the consequences if the transaction fails.

In recent times, attitudes to credit and economic conditions have changed with the
result that credit transactions – and levels of personal debt – have risen markedly in
many countries. Economic and technological change has increased the choice
available to consumers as well as the technical complexity of credit products.

In this environment, there is an essential need for a robust regulatory framework to
govern the borrowing and lending transaction. Sound credit regulation has proved
very difficult to design, but fortunately, there are many lessons that jurisdictions can
learn from the efforts of other countries – both historical and current.

The most recent effort to reform consumer credit law that I am aware of is the one that
I have been involved with: New Zealand’s Consumer Credit Bill.1 In developing the
Bill, we paid close attention to reform efforts that had taken place in other countries,
in particular Australia, but also Canada, the UK and the USA.

I understand that consumer credit reform has been tagged as a priority for consumer
law reform in some Asian countries, and that in many respects existing law is
outmoded and behind equivalent statutes in some Western countries. This paper aims
to:

   Provide a context to consumer credit law reform in New Zealand and the other
    jurisdictions.

   Highlight similarities and differences between jurisdictions, and the reasons for
    those differences.

   Discuss the differing objectives of consumer credit law.

   Given the context, explain the background to some of the policy choices
    underlying the Consumer Credit Bill.
   Make a few subjective observations based on my involvement in consumer credit
    law reform and what I have learned in New Zealand and elsewhere.

It is hoped that this will serve as a useful perspective for others contemplating or
embarking on consumer credit reform. Of course, I realise that cultural, historical, and
institutional factors, make every context different, and that countries have different
public policy objectives in respect of consumer credit law. However, in New Zealand
we benefited greatly from the experiences of others, and we hope to be able to pass
something on in return.



A brief history of consumer credit regulation

This section provides a basic overview of the consumer credit regulation in each
country, before highlighting and explaining some of the differences.



US: The Truth in Lending Act template

The “grandfather” of all the modern Western consumer credit statutes is the United
States Truth In Lending Act (TILA). Conceived in the early 1960s, it has been in
force since 1969, although heavily amended on a number of occasions, most notably
by the Truth in Lending Simplification Act in 1980.2

TILA has served as the template for all the consumer credit statutes that follow. Its
basic features are:3

   Application to virtually all forms of borrowing for consumer purposes, including
    sale and loan credit.4

   Detailed disclosure obligations upon lenders.

   A standardised method for calculating and disclosing the finance charge as a
    percentage rate per annum (the “APR”).

   Specific penalties against lenders, recoverable by consumers, for breaches of the
    legislation by lenders.

There have been many criticisms of aspects of TILA. Among the more significant
include doubt as to the utility of its required disclosures, in particular whether they are
in a form, or received at the right time, so that consumers can use them in the credit
shopping process.5

Another problem specific to the TILA regime is that through the process of
amendment, as well as the associated regulations and staff commentaries, it has
become hugely detailed and complex with the number of rules covering many pages
of text. One reason for this is because the basic structure of the Act has never been
revised, despite being designed for conditions prevailing in the 1960s. Instead,
regulators and the courts have tried to keep up by constantly adapting the subordinate
regulations and guidelines to changing conditions.
Nevertheless, the leading authority on TILA, Professor Ralph Rohner, concludes that
TILA is and an important and, by and large, successful statute and will remain in
place for the foreseeable future.6



Commonwealth countries

England had in place usury laws from at least medieval times. These laws reflected
religious proscription of lending money at interest and consequent social disapproval
of the practice. Usury laws were repealed in 1818. Following evidence of abuse by
moneylenders, the Moneylenders Act was passed in 1900.

The key features of the Moneylenders Act were the establishment of a licensing
regime for moneylenders, and court powers to overturn harsh and unconscionable
conduct by lenders. An amendment in 1927 established a presumption that interest
rates over 48 percent were unconscionable.

Sale credit, such as hire purchase contracts, did not fall under the Moneylenders Act.
Hire purchase is also treated as different from loans by the common law. Therefore,
separate hire-purchase legislation was developed.

New Zealand and Australia did not have usury laws in place. Both countries (in
Australia’s case, on a state by state basis) enacted versions of the Moneylenders Act
(including the 1927 amendment) and the Hire Purchase Act.



1970s and 1980s reform

Influenced by the debates concerning the TILA (and by Article 9 of the US
Commercial Code, which overhauled the laws on personal property securities)
Australia, the United Kingdom, Canadian states and New Zealand all appointed law
reform committees to examine and report on the state of consumer credit law.

Perhaps the most notable of these reports was the report of the Crowther Committee
in 1971, which summarised the themes that to varying degrees were shared in the
other reports. It criticised the state of the law in England (which applied in New
Zealand and Australia), by pointing out that:7

   Credit transactions were legally governed according to form, not substance,
    leading to artificial distinctions and excessive technicality. The classic example is
    that a hire purchase contract where the seller retains title in the goods is legally
    different to a sale contract with a mortgage back to the seller, yet in substance the
    transactions are equivalent.

   There was a failure of the law to sufficiently discriminate between credit
    transactions entered into for business purposes and consumer purposes.

   Credit law had become outmoded and unsuited to modern commercial conditions.
By the mid 1980s, New Zealand, most Australian states, the United Kingdom and
Canadian states had all enacted consumer credit statutes. Despite various significant
differences they were all based on the TILA template.



The present position

As mentioned, the TILA remains in force, and it is unlikely to undergo substantial
revision in the near future.8 The United Kingdom’s Consumer Credit Act 1974 is also
likely to continue in its present form for the foreseeable future, particularly as it forms
the basis of a 1987 European Union directive, which all EU states are expected to
comply with. The UK regime is also distinguished by excessive complexity,
particularly concerning methods for calculating the APR on a credit contract.

Under the aegis of its Uniform Law Conference, Canada has attempted to encourage
all provinces to enact a model Cost of Credit Disclosure Act. The model Act sticks
with the TILA template in key respects.9 Once adopted by provinces, the Act replaces
older “first-generation” consumer credit statutes.

Australian states were among the last10 to adopt modern consumer credit statutes, and
the first to replace them. Because of their poor drafting, excessive complexity,
economic inefficiency,11 and the often disproportionate penalties that lenders incurred
for breaches – both minor and technical, as well as serious – the Credit Acts adopted
in the mid-1980s were replaced in 1994 with the Consumer Credit Code.12

Lately, the Code has been amended to capture the operations of “payday” lenders
who, due to an exemption for short term credit, fell outside the provisions of the
Code. Payday lending is distinguished by short-term loans at high rates and is often
perceived as unfair.13

In New Zealand, the Credit Contracts Act was adopted in 1981. While it has been
relatively successful in comparison with its overseas counterparts, it (along with the
Hire Purchase Act 1971) is scheduled to be replaced by the Consumer Credit Bill.

It is interesting to note that, with the exception of the UK and USA, all the other states
and countries mentioned above have replaced and up-dated (or are in the process of
doing so) their original consumer credit regime. My impression is that the political
systems in the UK and the USA do not really facilitate law reform quite so easily,
despite the case for consumer credit reform in both countries.



Factors influencing law reform

The countries described above have market economies and similar legal systems, and
credit transactions are fundamentally the same despite the setting. Therefore it is
unsurprising that the legislation is similar. Moreover, from a law reformer’s
perspective it saves time and effort to adapt a successful precedent.

Nevertheless, differences inevitably result. Some of the more important factors are:
   Existing legislation

Much law reform builds on and adapts existing frameworks rather than making
wholesale change. This is particularly likely when moving from a first generation
consumer credit regime to a second generation. The transition to the new regime
becomes easier and uncertainty is reduced if something is kept from the old regime.

   Institutional and political environment for law reform

Some countries are able to introduce far-reaching or significant reform measures
because the law reform machinery supports this. For instance, in New Zealand the
Consumer Credit Bill would not have been developed if it consumer credit policy was
not the responsibility of a dedicated consumer affairs agency. When credit policy was
housed within a larger, multi-purpose department, the prospect of reform was
remote.14

It may also depend on timing and luck – eg having a sympathetic minister with
influence within the government. In other cases, more gradual or modest proposals
may be the best that can be achieved. Similarly, the dominant philosophy of the
government may not be sympathetic to consumer protection for a variety of reasons.

   Power of pressure groups

Pressure group pressure is part of the political an institutional environment. The
outcome of consumer credit regulation can depend on the influence of pressure
groups. For example, banks have a lot of influence, whereas small-scale consumer
lenders, often derided as “loan sharks”, have less.

The power of the organised consumer movement is also critical. Australia, in my
view, has a vocal and influential consumer movement and is often able to see its
agenda directly translated into policy and legislation: examples include new measures
on payday loans, comparison rates and “overcommitment”. By contrast, New
Zealand’s consumer lobby is more laid back, or in some cases has different concerns,
and regulators have not come under pressure to enact similar measures.

   Cultural attitudes to credit and debt

It is common to encounter deep seated unease with credit and debt. In Western
societies, this may be traced back to biblical injunctions against usury and historical
proscriptions on lending. Aristotle and Marx also condemned lending at interest. In
Islam too, there are religious injunctions against usury. This attitude can support
regulation that restricts creditors activities, such as interest rate caps.

In other cases, access to credit is regarded as a “right”. This may be the case in the
US, which has amended TILA to prohibit discrimination in the granting of credit and
which has enacted the Community Reinvestment Act to improve access to credit in
poor neighbourhoods.

   Technological development
At the time early consumer credit statutes were developed and implemented, many
lenders used manual systems to set up and administer credit contracts. Legislation
accordingly accommodated such systems, for instance by allowing various
approximate methods of calculating balances on loans that, while not strictly accurate,
were easy to calculate by hand or by reference to tables. A well known example of
this is the Rule of 78.15

In modern times, however, almost all lenders are computerised. New Zealand and
Australian legislation assumes all lenders are – or can become – computerised and no
longer accommodates manual practices. The reason for this is because manual
systems often lead to unfair results. Computerisation removes a barrier to information
flows from lender to consumer (eg, it becomes reasonable to require lenders to make
certain calculations at different points of the loan because they can be done efficiently
and cheaply by computer).



Objectives of consumer credit law

Different approaches to consumer credit also result depend on the objectives that are
hoped to be achieved by the legislation. The objectives of New Zealand’s Consumer
Credit Bill are fairly conventional and can be summarised as follows:16

   Efficient, functioning consumer credit markets. Consumer credit regulation is
    necessary to deal with failures in the credit market, in particular information
    failures.

   Improved the information available to consumers about the cost and the terms of
    credit, and which facilitate positive choices by consumers while reducing the
    chances that they may be misled.

   Prevention of oppressive conduct by lenders. Most consumer credit statutes have
    provisions providing the Courts with remedies in response to unconscionable
    conduct by lenders. Australian provisions would appear to be the most
    comprehensive.

Other functions of credit legislation found in different statutes include:

Occupational regulation – control over which persons are permitted to provide credit.
A key feature of the UK Consumer Credit Act is its licensing regime for credit
providers.

Prevention of overindebtedness – this is an important focus of Australian consumer
credit law but is not found in other statutes.

Restriction of creditors’ remedies – many statutes place restrictions on the amount of
security a creditor may take and the techniques that may be used to recover debts –
although in other jurisdictions such rules may be contained in personal property
securities legislation.

Consumer credit and the poor
An interesting question is whether consumer credit is the correct vehicle for income
redistribution or improving the position of poor consumers The conventional view is
that expressed by two eminent authorities on consumer credit law.

Professor Roy Goode, writing in the UK, said: “Consumer credit legislation, although
often associated with the protection of the indigent, is in truth neither designed nor
equipped for the special needs of the low income consumer. There is nothing in
consumer credit legislation can do to provide the consumer with a good job, a
reasonable income or a roof over his head”. 17

Similarly, Professor Ralph Rohner in writing about things that consumer credit
legislation cannot do notes that “it certainly cannot fix the economic disabilities of the
poor”. 18

An alternative viewpoint is put forward by Professor Iain Ramsay who critiques
comments such as those above, and their variants from the influential law and
economics movement. Ramsay, following some European theorists, argues that as
well as promoting a primary role for consumer credit as a redistributory mechanism,
consumer credit regulation could supplement the welfare state in offering security
against unemployment and illness. This proposal “may influence the development of
the law by injecting discussion of unemployment and social division into the world of
contract doctrine and texts”.19

This is a radical proposal which is unlikely to become widely influential. Certainly, it
would be difficult to reach a consensus between financial interests and consumers that
consumer credit law should adopt the goals of the welfare state. However, it is
possible to implement measures to deal with particular lending practices which harm
low-income consumers. Good examples are by outlawing the rule of 78, controlling
non-interest charges offered by lenders, by standardising the methods used to
calculate interest, and through a good public enforcement mechanism to deter fraud
and unfair practices by sub-prime lenders which overwhelmingly impact on low
income people.



An overview of the New Zealand Consumer Credit Bill

This section briefly explains some of the policy choices enacted in the Consumer
Credit Bill. Before dealing with the Bill, it is necessary to briefly describe what the
Bill replaces.

Background

As mentioned above, New Zealand enacted the Money Lenders Act and a Hire
Purchase Act (in 1939 and 1971). In 1977 a law reform committee recommended the
law be overhauled and in 1981 the Credit Contracts Act was passed.

The key reforms brought about by the Credit Contracts Act were:

   Removal of the requirement for lenders to be licensed.

   Extension of regulation to cover business loans up to a value of $250,000.
   The removal of many artificial distinctions based on form over substance.
    Nevertheless, the Hire Purchase Act was kept in place for hire purchase and
    conditional sale contracts.

   Disclosure obligations on lenders, including the requirement to calculate and
    disclose an APR (called a finance rate in New Zealand).

   Wide ranging powers for the Court to reopen oppressive contracts. In fact, at the
    time, this was seen as more important than the disclosure provisions.

   Civil penalties that can be claimed against lenders that breach the legislation.



The Consumer Credit Bill

The Consumer Credit Bill follows and updates the TILA template. Its key features are
described below.

Restriction to contracts entered into by individuals primarily for consumer purposes.

The Credit Contracts Act is exceptional in its extension to business contracts. Our
conclusion now is that there is only a weak case for regulating commercial credit, and
that the priorities of commercial debtors are different to those of consumer debtors,
being more focused on cost and flexibility rather than protection.

Reform of the disclosure requirements:

The most notable reforms are extension of information disclosure requirements
throughout the life of the loan (something made feasible because of computerisation
of the industry), and removal of the requirement to disclose the finance rate (APR).
Consumers also have rights of “request disclosure” and must receive details from
creditors of changes made to the conditions of the contract.

Substantive restrictions on the method used to calculate interest and on non-interest
fees that may be imposed by lenders.

One of the severest informational barriers faced by consumers in the credit market is
the multitude of methods that lenders may used to charge and disclose interest on a
loan.

The traditional response has been to allow creditors to continue to use what ever
method they want, but to also require calculation of the APR. In our view, the APR is
a concept that has not translated into something useful for consumers.20 Following the
Australian precedent, we abandoned the ARP in the Consumer Credit Bill.

However, lenders are now restricted in the methods they use to calculate interest. For
example, interest may not be charged in advance (ie, it must be earned before it is
charged, thus among other things prohibiting “discount” interest and the rule of 78),
and the amount of an interest charge must not exceed the amount arrived at by
applying a daily interest rate to the outstanding balance for the day.
As a result, it has also been necessary to restrict non-interest charges imposed by
lenders. Otherwise, lender’s will use such charges to avoid the restrictions on interest
charging. The Bill limits non-interest charges to the lender’s actual and reasonable
costs.

Again, this policy depends on the financial industry being computerised.

Simplification of the civil remedies that may be claimed by borrowers against debtors
and providing for public third-party enforcement

The Credit Contracts Act relied on consumers themselves to take action against
lenders in breach of the Act. This is known as “self-enforcement” and proved totally
unrealistic – consumers lack the incentive and the wherewithal to take action against
lenders. While lack of enforcement is not a problem in the competitive end of the
market – because breaches are rare – it gives lower-end lenders the confidence to
breach the law with impunity, at significant cost to lower income borrowers.

This contrasts with the situation in the US and Australia where, because of differences
in the institutional environment,21 enforcement against lenders is common. However,
in many cases claims are based on technical breaches with the consumer’s loss being
insignificant, and merely frustrate legitimate debt-collection by creditors.

An effective third-party enforcement offers a preferable solution to both of these
situations, while still allowing consumers to take action themselves. It has the support
of both lender and consumer interests. However, it must have sufficient resources to
be effective.



Some conclusions

Based on my understanding of the history of consumer credit and recent reform
efforts, I would like to offer a series of subjective conclusions which may be useful to
those in other jurisdictions embarking on or contemplating consumer credit reform.

Substance over form

One of the important and long-lasting achievements of the first generation consumer
credit statutes was to remove long-standing, artificial technicalities based on form
over substance. Before such reform, drafters of contracts would be preoccupied with
the avoidance of regulation, with the consequence that consumer understanding was
impeded and retailers and lenders became excessively dependent on legal advice.22

The importance of compliance and enforcement

It matters little how elegant a statute is drafted, or how substantial the rights it confers
on consumers, if lenders lack the incentive to comply with it. In our experience,
lenders operating in competitive markets, and who are concerned with their
reputation, will make genuine efforts to comply with the law. Where such conditions
are lacking, non-compliance is a problem. It is simply unrealistic to expect consumers
to take action themselves in sufficient numbers to discipline the market – at least in
the absence of a system that facilitates class actions.
Enforcement becomes more important when lenders have a strong incentive not to
comply with the law. For instance, if interest rate caps are in place, historical evidence
suggests that lenders will find ways around them, eg through inflated non-interest
charges and other devices. If a policy such as interest rate caps was to work, there
would have to be a lot of emphasis given to enforcement.

Broad court powers in response to unconscionable conduct by lenders are inadequate

In New Zealand, the Courts have set a high threshold before determining conduct to
be oppressive – too high to catch the routine unfair practices of many lenders. In
addition, there are high transaction and financial costs for consumers taking court
action to claim the remedies. Unconscionability provisions are useful to deal with the
really “hard” cases that make it to court, but otherwise offer limited protection.

Australia’s detailed unconscionability sections have been heavily criticised by the
Professor Duggan, Australia’s leading authority on consumer credit.23

Credit law is not necessarily the appropriate vehicle for reducing consumer debt

Credit and debt are often referred to in the same breath, but consumer credit law is not
a vehicle for reducing personal debt. Rather it seeks to better inform consumers so
that they have an understanding of their commitments, are better able to seek out
credit deals on terms they desire and are treated fairly.

Australian statutes have tried to make lenders take some responsibility for
overindebtedness of borrowers, for instance, a contract may be reopened if the
creditor can be shown to have not properly assessed the ability of the borrower to
repay. In New Zealand we rejected such measures for reasons of principle and
practicality. Reasons for this include the extra uncertainty it adds to the credit granting
process and the absurdity of a rule which allows a debtor to apply for relief on the
basis that the lender should not have believed his promise to repay his debt.

We also sought to avoid measures which either implicitly or explicitly sought to deny
low-income consumers credit. Referring back to discussion of consumer credit and
the poor, we believe it is more useful to facilitate access to market opportunities,
including credit, for low income people, rather than deny or restrict them.

Measures to deal with consumer debt, in our view, are better dealt with by other
policy instruments, such as the income support system, bankruptcy laws or education.



Comprehensive coverage

It was mentioned earlier that an exemption for short term credit (defined as credit
provided for a period of less than 62 days) in Australia had allowed pay day lending
to flourish. Recent amendments have brought pay day lending within the Code and
officials are examining whether special rules should apply. In Canada, following a
comprehensive report on the alternative credit market, Professor Iain Ramsay has
recommended a “Model Deferred Deposit Loan Act”, to regulate that market.24
Our view is that the same rules should apply to all consumer credit transactions, with
exemptions limited as much as possible. We consider that the same rules which apply
to, say, home loans, can also apply to pay day loans. One reason why is because
classification of different lenders becomes very difficult.

There is obviously a trade-off with comprehensiveness because legislation designed
for mainstream lenders may be too light-handed for marginal lenders, and legislation
aimed at marginal lenders may impose unacceptable costs on the mainstream.
Comprehensive legislation is likely to be weighted in favour of the interests
mainstream lenders, however, a few basic rules relating to interest charges, disclosure
etc, backed up by meaningful penalties and enforcement is likely to be a sufficient
compromise.25

Substitution effects

There is a well known risk with consumer legislation, particularly, credit legislation of
market behaviour changing to produce unintended consequences or “substitution
effects”. A good example is that if a particular class of consumers is denied access to
credit – eg through interest rate caps – a black market may form to service those
consumers, placing the consumer at much higher risk. It is easy to envisage similar
effects if a statute was implemented that required lenders to become computerised if
large numbers still used manual systems – depending on the ease and cost of
becoming computerised.

Disclosure vs regulation of terms

Economists are likely to favour disclosure of the price and terms of credit contracts,
rather than direct regulation of the terms, on the grounds that regulation of terms is
likely to be inefficient.26 TILA is a disclosure statute, and the response to almost
every problem that has arisen in the US has been more disclosure.27 We think some
regulation of the terms concerning pricing methods used by lenders is justified, in
particular, some standardisation of interest charging methods and some limited
restrictions on non-interest charging.

This is an area where disclosure is totally inadequate, with costs outweighing the
benefit. Modern theory has given much more focus to the costs to consumers in
becoming informed, pointing out that too much information, or information that is
difficult to interpret, is counterproductive.28 The APR debate is another example of
where the benefits of disclosure have been oversold.

In regulating pricing methods, however, the challenge is to not restrict pricing
flexibility of lenders by too great a degree. The risk is that lenders will be restricted in
providing new products, or that cross-subsidisation will result. Both results harm
consumers. However, pricing flexibility is not simply a matter of convenience for
lenders: prohibiting the rule of 78 and add-on methods of interest charging (such as
under the Australian Code and NZ’s Consumer Credit Bill) on instalment loans
restricts pricing flexibilty, but does not prevent lenders from offering instalment loans
(because other methods are available).
Note: This paper contains my personal view and does not necessarily reflect the
position of the Ministry of Consumer Affairs or the New Zealand Government.



1
     A copy may be found at www.consumer-ministry.govt.nz/papers/papers_pdf/consumer-credit-
     bill.pdf
2
     TILA supplements various state laws. In 1968, eight states adopted the Uniform Consumer Credit
     Code, and four adopted a revised version in 1974. The UCCC gives consumers additional rights to
     those found in TILA, including substantive restrictions on contract terms – notably following
     default by the consumer.
3
     Other aspects covered in the legislation include credit card billing and reporting.
4
     The Act applies to home loans, pawnbroker loans, credit sales, credit cards and cash loans. Leases
     are regulated under the Consumer Leasing Act, while “rent to own” contracts fall outside any
     regulatory regime.
5
     One of the best critiques is Landers and Rohner “A Functional Analysis of Truth in Lending”
     (1979) 26 UCLA Law Review 711
6
     Rohner “Whither Truth in Lending” (1996) 50 Consumer Finance Quarterly Law Report 114.
7
     The report is concerned with issues relating to personal property securities as much as with credit.
8
     Rohner, op cit, at n 6
9
     Bowes, “Annual Percentage Rate Disclosure in Canadian Cost of Credit Disclosure Legislation”
     (1997) 29 Canadian Business Law Journal 183.
10
     With the exception of South Australia, which passed the Consumer Credit Act in 1972, and
     Tasmania and Northern Territory, which never passed consumer credit statutes until the Uniform
     Consumer Credit Code in 1994.
11
     Eg, the Credit Act 1984 (NSW) prohibited charges other than interest. This lead to cross-
     subsidisation and also limited competition because it restricted the ability of credit providers to
     offer new credit products
12
     Duggan and Lanyon Consumer Credit Law, (Sydney: Butterworths, 1999), chapter 1.
13
     Queensland Office of Fair Trading “Fringe" Credit Provider: A Report and Issues Paper, (May,
     1999).
14
     The Ministry of Consumer Affairs was formed in 1986 and took responsibility for consumer credit
     policy in 1998. From1981 to 1998 consumer credit policy was the responsibility of the Department
     of Justice, which was not able to give priority to credit law reform.
15
     The Rule of 78 is a method of distributing “add-on” interest over the term of the loan. It apportions
     the interest and the principal component to each payment under a loan. However, it is only an
     approximation of the true actuarial rate, and tends to favour the lender by loading most of the
     interest to the front of the loan.
16
     See McBride and Bowie, “The Goals of Consumer Credit Law: The Approach of the Ministry of
     Consumer Affairs to its Consumer Credit Law Review” (2001) 7(4) New Zealand Business Law
     Quarterly 329.
17
     Goode (Ed) Consumer Credit (1978), cited in Ramsay “Consumer Credit Law, Redistributive
     Justice and the Welfare State” (1995) 15(2) Oxford Journal of Legal Studies 177.
18
     Rohner, op cit, n 6.
19
     Ramsay, op cit, n 17.
20
     Ministry of Consumer Affairs, Consumer Credit Law Review Part 3: Transparency in Consumer
     Credit: Interest, Fees and Disclosure. Available at
     www.consumeraffairs.govt.nz/discussion_papers/dp_credit_transparency.html
21
     For instance, because of rules concerning court cost awards and contingency fees, class actions in
     response to creditor breaches are feasible and attractive to many consumers and their lawyers.
22
           Duggan and Lanyon, op cit, n 12.
23
     ibid.
24
     Ramsay, “The Alternative Consumer Credit Market and Financial Sector: Regulatory Issues and
     Approaches” (2001) 35(3) Canadian Business Law Journal 325. An earlier version is available
     online at http://strategis.ic.gc.ca/pics/ca/ramsayen.pdf.
25
     McBride and Bowie, op cit, n 16
26
     Most examples of regulation of terms relate to creditors remedies.
27
     Eg following concerns about “high cost” mortgages, the US Congress added a new layer of
     disclosures in 1994 which apply in respect of such mortgages.
28
     Hadfield, Howse and Trebilcock “Information-based Principles for Rethinking Consumer
     Protection Policy” (1998) 21 Journal of Consumer Policy 131.