HHA - HIGH COST LOANS AND CCCFA COMPLIANCE EFFECTIVE 1 MAY 2020



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As you are probably aware there has been an rapid update of legislation activated for the 1 May 2020 instead of the expected 1 June 2020.
 
These new rules will apply to lenders providing consumer credit contracts where;
  • The annual interest rate is 50% or higher
  • The weighted annual interest rate applied to the unpaid balance is, or likely to be 50% or greater on any day during the term of the loan.
  • The sum of all interest charges that are payable at one time on the Loan is greater than 50%
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We have been working with any parties who have this set of conditions with some excellent results.
Now we can announce, that Intersoft Systems Ltd have provided a major upgrade to  the finPOWER Connect Software to cater very comprehensively for the setup of the new account type.
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The areas covered are:
  • Treatment of the Maximum total Interest Rate
  • Limit on cost of Borrowing
  • Repeat Lending
  • Rate of Charge/Rate cap (from 1 June 2020)
  • Default Fees Cap
 
Limits on these accounts, include: 
No ability to refinance or reopen, the restructure function is not available, no withdrawals permitted after the initial advance, refund processing, no transfers, no parent/child relationships are permitted. 
These are all settings and can be maintained as required.
An effective warning system has been put in place to ensure there is at least 15 days between account setups.
If you are considering entering into this market place, please contact us and we can arrange for the new software to be installed.   This is a database upgrade from 3.2 to 3.3.

The legislation can be found on the Government Legislative website.


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Disclaimer 
All views expressed in the document are that of HHA Associates Limited and should not be construed or taken as legal advice whatsoever. We encourage all readers of this document to seek their own legal clarification and interpretation to understand how anything in this document may affect them or their business interests.
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