New Zealand's Consumer Affairs Minister, Craig Foss, has announced plans for wide-ranging reforms of New Zealand's consumer credit and repossession laws that banks fear could impose significant extra regulatory costs on the sector.The Consumer Credit and Financial Services Law Reform Bill was introduced to Parliament late on Thursday and included changes aimed at reducing lending to people who can't afford the loan."The changes introduced today represent a crackdown on unscrupulous lenders who prey on desperate people and leave them and their families trapped in a spiral of debt," Foss said."The changes will usher in an era where lenders must act responsibly, where consumers have the information they need and where there are significant consequences for those who breach the law," he said.The changes include forcing lenders to take into account the borrowers' ability to repay and banning those lenders who don't lend responsibly."Lenders will only be able to lend money when the loan meets the borrower's requirements and objectives, and the payments required won't cause substantial hardship for the borrower," Foss said, adding a new code for responsible lending would be introduced.The bill included controls against what Foss called misleading, deceptive or confusing advertising. Repossession agents would also be licensed.However New Zealand Bankers Association chief executive Kirk Hope said the government had missed its aim of cracking down on loan sharks and payday lenders, and would instead add regulatory costs to the majority of bank lenders, who were already acting responsibly.Hope told Banking Day banks welcomed the aims of the legislation, but were concerned it would add compliance costs and cause unintended consequences, without significantly restricting the activities of loan sharks working below the radar and charging interest rates of up to 1000 per cent.He said New Zealand banks were concerned the government was following too closely the framework for reforms recently introduced in Australia, but had not taken into account its mistakes and that it was already being reviewed.Hope said the Association would give a more detailed response in submissions to the bill in coming months.More detail on the proposals are available at the Consumer Affairs Ministry website http://www.consumeraffairs.govt.nz/legislation-policy/policy-development/credit-review