Zoe Hunter: New lending rules an invasion of privacy, but something borrowers have to accept

The new CCCFA rules mean banks are taking a deeper dive into how much people spend. Photo / Getty Images

OPINION:

So you want to buy a house or top up your mortgage?

Well, your banker wants to know how much you spent on that hair appointment three months ago.

What about your nail appointment and that dinner out with friends the other week? Did you really spend that much on Afterpay this Christmas?

They also want to know why you're spending $100 a month on subscriptions.

That's right. If you want to borrow money, your bank wants to know what you're spending every dollar and cent on.

I mean, when you're asking to borrow half a million dollars or more, I guess they are protecting you from drowning in debt that you may not be able to pay back.

But where is the line drawn when it comes to privacy and personal choice?

Some things we spend our money on is personal and for one-off items.

The Credit Contracts and Consumer Finance Act, introduced on December 1, requires more detailed financial information from people wanting to borrow money.

Every transaction is being analysed and questioned, including how much you pay to get your eyebrows waxed, as one woman told NZME this week.

Another woman was punished for her $187 Kmart shop from a bank she'd been with for 20 years.

With tighter regulations and a deeper dive into finances comes much less room for lender discretion - meaning more applications can be declined.

One mortgage broker told NZME the uncommitted net monthly income amount borrowers needed in some loan scenarios had jumped from $700 to $1100.

That is a lot of untouched cash, in my opinion, especially when the cost of living has also risen and wages aren't keeping up.

Going through applications to borrow money with a fine-tooth comb means it can be taking some banks longer to process.

Some mortgage brokers told NZME the time it was taking some banks to process loan applications was "ridiculous". In some cases it was as long as 27 days.

Consumer NZ revealed last year that banks reported 100,000-plus customer complaints to the Banking Ombudsman, poor customer service being the most common complaint.

Ultimately, banks are accountable to their customers and, at the end of the day, they are just following the rules.

New Zealand Bankers' Association chief executive Roger Beaumont told NZME banks are responsible lenders and took their obligations under the law very seriously.

I don't agree with the changes but it's not the banks' fault. So don't shoot the messenger.

For me personally, I am trying to borrow from the bank to buy another home - and that means being extra strict on how much I spend.

I have deleted my Afterpay account and considered getting rid of my credit card.

I'm now stopping dining out, cancelling those hair appointments, nail appointments and online subscriptions.

It means I won't have a social life for the next three months - or be as well-groomed as I normally am.

I am not happy about it and believe it is an invasion of privacy.

But I am also practical and accept that tightening my spending could mean I'm one step closer to being able to borrow more money.