Yesterday, Dr Clark, who is the MP for Dunedin, spoke to the Financial Services Council’s (FSC) Future Ready Advice Summit about his priorities in the portfolio.
The summit was meant to be held in Queenstown over two days this week, but was forced online due to Covid-19.
Changes to the Credit Contracts and Consumer Finance Act (CCCFA), which came into effect late last year, were intended to clamp down on loan sharks, but have caused banks to closely vet mortgage applicants’ personal finances and spending habits.
Last month, the Otago Daily Times reported multiple stories about people struggling to gain mortgages because of Kmart shopping trips, Netflix accounts, restaurant eating habits and therapy sessions.
Dr Clark ordered an investigation, which is being undertaken by the Ministry of Business, Innovation and Employment (MBIE) and the Council of Financial Regulators, to see if the changes were having unintended consequences.
Dr Clark told the summit yesterday he had recently met the banks, who had provided "very constructive suggestions".
They were "really sensible" ideas that needed to be considered, particularly regarding what was considered an expense.
"Things like savings, they don’t feel right at an intuitive level to me."
FSC chief executive Richard Klipin asked the minister how quickly he would like to see the rules changed if that was what the investigation recommended — "sooner rather than later", Dr Clark said.
He wanted to make "no-regret changes" because everyone wanted to see the rules working the right way.
People’s experiences with the CCCFA which had been reported in the media might have involved other factors such as loan-to-value ratio restrictions and economic conditions, he said.
Speaking after Dr Clark, National Party commerce spokesman Andrew Bayly said his party had supported the legislation because it did not want to see people take on debt they could not afford, but now it was having the opposite effect.
It was "vitally important" that the minister got it right.
"We need to get it right so people can get credit, but also we want to protect the vulnerable."
Mr Bayly and National deputy leader Nicola Willis last week wrote to Dr Clark asking him to adopt their draft law, which would loosen lending restrictions for banks, as a matter of urgency.
Dr Clark replied saying that based on his discussions with banks, he detected little enthusiasm for an entirely new set of rules for banks and other regulated lenders.
They had suggested small tweaks that could be made to ensure the purposes of the legislation were best met.
Passing a new law "would result in undue delay to consumer benefit from possible tweaks that could be made to regulations and guidance in the nearer term", Dr Clark said.
An MBIE spokeswoman confirmed the ministry was on track to provide its initial advice on time and expected to provide further advice in April.
