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What happens in this scenario

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  • 22-12-2019 10:06pm
    #1
    Elite Woad Raider
    Closed Accounts Posts: 77 ✭✭


    A finance company is registered in New Zealand and it offers loans to customers for vehicle purchasing.

    The company is a subsidiary of a holding company based in the USA.

    If the new Zealand company winds up what happens to its loans?
    Will the loans be subject to New Zealand law or US law?


Comments

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    #2
    bbbbb
    Registered Users Posts: 731 ✭✭✭bbbbb


    (Not a legal or banking person)
    If they were exiting the market I would imagine they would sell the loans to a local operator, like bank os Scotland Ireland did with pepper finance.


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    #3
    Victor
    Registered Users Posts: 78,299 ✭✭✭✭Victor


    The contract / loan agreement for the loan will likely stipulate what jurisdiction it is subject to. This would usually be where the loan is made, which might be neither New Zealand not the USA. It also likely envisages the possibility of the loan being assigned to a third party and will stipulate what happens in such an event.

    There may be regulatory / conduct of business rules that also apply operated by the relevant financial regulator.


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