New law for credit unions, finance companies
Parliament has passed a law described as a "complete waste of time" which introduces a licencing regime for non-bank deposit takers (NBDTs).
The Non-bank Deposit Takers Act 2013, which is expected to come into force in May 2014, covers finance companies, building societies, and credit unions.
It gives the Reserve Bank new powers to intervene if a NBDT gets into trouble, and retains existing risk management and governance requirements.
During the third and final reading of the bill, Labour MP David Clark described it as "a complete waste of time".
"The Government ought to be focused on rebalancing the economy, not on passing bills that simply shift legislation from one part of the book to another," he said.
Henry Lynch, chief executive of the New Zealand Association of Credit Unions, was also unconvinced of the law's usefulness.
"It's not a big deal because a lot of these things we do already," he said.
"What is a big deal, is why do we have to go and do them again under another compliance regime? That's where it does seem a little bit strange to us."
Credit unions are far more concerned about the outcome of a separate review of the NBDT sector carried out by the Reserve Bank recently.
The review proposed to give the central bank greater powers, raised questions about the role of trustees, and suggested a broader range of penalties.
"We'd like some certain things there changed so that we can actually do business for our members in a much easier fashion," said Lynch.
The collapse of the finance company sector saw credit unions saddled with a burdensome dual trustee system.
Many credit unions resent being lumped in with finance companies despite having completely different business models.
The industry wants to get rid of the extra trustee layer and report directly to the Reserve Bank, as well as make other changes such as being able to lend to small businesses.
The 58 NBDTs held assets of $14 billion as at May this year, down significantly from the $25b held in late 2007.
Parliament has also passed the Reserve Bank of New Zealand (Covered Bonds) Amendment Act 2013, which gives greater certainty and transparency for covered bonds issued by banks.
The establishment of a legal framework for the controversial debt instruments has previously been compared to prostitution law reform.