When financial expert Christopher Walsh attempted to lower the credit limit on his Kiwibank Air New Zealand Airpoints Platinum Visa credit card from $ 9,500 to $ 10,000, he was given a 15-page form to fill out.

“Fifteen-page forms for day-to-day banking? “It’s crazy,” said Walsh, who runs financial research website MoneyHub.

Kiwibank introduced the form to comply with strict loan laws introduced on December 1, which were supposed to protect vulnerable borrowers from unscrupulous lenders.

But mortgage brokers say the new laws caused an artificial credit crunch as loan applications became a “bloody nightmare” and many people trying to buy their first home were no longer eligible for loans.

READ MORE:
* Air New Zealand to launch Airpoints credit card in 2022
* Kiwis spend $ 1.6 million a day on credit card fees: here’s how to get by
* Why aren’t credit card rates going down while mortgage rates go down?

Walsh said his experience has shown that bank home loans aren’t the only ones being disrupted by the changes in the law.

The Kiwibank form required Walsh to fill out detailed information, including: his age, relationship status, if he had any dependents, if he was a tenant or landlord, his work status, who employed him (and during how long), his detailed income and expenses, if he had a student loan (and by how much), if he was in KiwiSaver (and how much he contributed), if he had any benefits (and which ones), he had a car allowance at work, the full value of his assets, whether he had any other loans (and how many there were), whether he paid tithing or paid private school fees, and why he wanted the extra credit.

Walsh was not asking for a dangerous level of credit.

He said he had only tinkered with his credit limit to see how Kiwibank responded to the December 1 changes to the Credit Agreements and Consumer Finance Act (CCCFA).

“I lowered the limit to $ 9,500 to raise it to $ 10,000, the computer says, ‘No, fill out this form,’” he said.

“So I took it from $ 9,500 to $ 9,000, and tried to bring it down to $ 9,500. No, the form must be completed. I have had this card since 2014. Never missed payment. But the computer says ‘no’.

“It’s laughable,” he said.

A spokesperson for Kiwibank said: “We know this new process is more intense and we are doing our best to reduce the impact for our customers.

She said: “Like all lenders, Kiwibank is required to comply with the CCCFA and its regulations.”

“Recent changes are forcing us to collect more information and carry out specific surveys to determine whether loans are both appropriate and affordable,” she said.

The law applied to both new loans and changes to existing loans, she said.

“Whether you’re borrowing to buy a dishwasher, renovating your car with financing, getting a home loan, or as in this case extending your credit card limit, these new rules apply. She said.

Customer feedback had already led Kiwibank to modify the form to make it clearer and easier for customers to understand and complete, she said.

Mortgage broker John Bolton is campaigning for home loans to be excluded from the new laws.

He collected signatures on a petition to exempt home loans from the new laws, resulting in “an unfathomable increase in bureaucracy and high cost with no tangible benefit to society.”

Bolton plans to lobby Parliament early this year, but Walsh would like to see more than just exempt home loans.

“John Bolton is 100% right with mortgages,” Walsh said. “Now let’s move on to risk-free credit card customers. “

Walsh said he had managed his accounts with Kiwibank with care and diligence for years, never paid a dime in interest, and did not need protection.

“I am not a victim of payday loans or oppressive interest rates,” he said.

Walsh said Kiwibank was not alone in introducing intrusive forms for modest credit limit changes.

“Reddit is full of complaints about people being rejected for minor balancing acts. That’s if the banks stopped making automatic decisions, ”he said.

Banks had not communicated to their customers the things they would need after Dec. 1, Walsh said.

He called on banks to invest more in systems, so they can automate decision making for long-term customers who they should know have a low risk of default.

“Go systems here. Know your customers, the people, ”he said.