Key, who is the chairman of ANZ, said “the CCCFA...makes it really hard for us to bank for marginalised New Zealanders.”

“What we are really doing is sending them to non-regulated or very lowly-regulated financial services.” 

Key also took aim at the idea of limiting lending according to a debt-to-income ratio (DTI), which he said would cause harm for low income New Zealanders.  

He suggested there was no indeed for rules like these anyway, because banks are already conservative in the amount of high LVR lending that they did. 

All it did was hurt other people.

“But again, the people who really need to get into a home to do all the things they want to do, might not necessarily have the deposits and they do not have the Bank of Mum and Dad to help them.

“So I just wonder, we pile on regulation onto the banks, where it is counter productive and sending a lot of (customers) to places we can’t see.”

The CCCFA was passed into law in late 2021 and immediately provoked a storm of protest.

It was accused of smothering lenders and advisers in layers of expensive bureaucracy with few beneficial results. It was also accused of depriving perfectly solvent borrowers from loans they would otherwise qualify for.

A review of the law was ordered within two months of its being passed and two limited reforms were undertaken. 

These included removing the notorious cups of latte that were added to a would-be borrower's expenses. A second tranche of reforms was later proposed but has not yet been activated. 

Both tranches were condemned as inadequate by critics from across the financial sector.

Key was speaking at the Institute of Finance Professional of New Zealand (INFINZ) conference in Auckland last week.