PoO was cheered to read the headline which announced Commonsense financial reforms underway.
We tempered that with wariness, because the headline sat atop a press statement from the Beehive, from the office of Commerce and Consumer Affairs Minister Scott Simpson. And in our experience, a Minister’s notion of common sense is apt to be at odds with the public’s notion of common sense.
Our wariness turned to scepticism when we winkled out the reaction of a bloke called Scott Russell, a lawyer.
His press statement is headed Government Sides with Big Banks Over Kiwis in Dangerous Rewrite of Consumer Law.
PoO found it on the lawfuel.com website in an item headed How the NZ Government is Protecting Australia’s Biggest Banks – But Not Kiwi Consumers.
That’s not to rubbish the Minister’s claim to be bringing common sense to his legislative chores on this matter..
It may well be common sense to protect the Aussie banks at the expense of their Kiwi customers, although it would be great to hear him questioned on the matter, because Scott Russell is leading the class action against the ASB and ANZ banks.
Russell contends
“…the retrospective legislation designed to protect the Australian-owned banks is a slap in the face for kiwi bank users”.
In his statement, Scott Simpson said the Government has taken “a major step toward restoring common sense to financial regulation, with the first readings of three important reform bills”.
“Our Government is delivering on its promise to make it easier for New Zealanders to access the financial services they need, whether it’s buying a home, growing a business, or simply managing everyday life,” says Mr Simpson.
“For too long, New Zealanders have been trapped by rules that are overly bureaucratic, unnecessarily repetitive, and sometimes just downright silly. Today, we’ve begun to fix that.”
The Credit Contracts and Consumer Finance Amendment Bill, the Financial Markets Conduct Amendment Bill, and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill are the first legislative steps in a broader package aimed at rewiring New Zealand’s financial services regulation. Together, they form part of a comprehensive overhaul that- Scott Simpson insists – will rebalance the system to ensure consumer protection without stifling access to credit or innovation.
“For many Kiwis, the absurdity of past rules became clear when banks were forced to quiz them about what they’d been spending on takeaways or Netflix subscriptions before approving a mortgage. That wasn’t responsible lending, it was regulatory overreach.”
The three bills “focus on addressing some of the most counterproductive aspects of the current law”:
His press statement is headed Government Sides with Big Banks Over Kiwis in Dangerous Rewrite of Consumer Law.
PoO found it on the lawfuel.com website in an item headed How the NZ Government is Protecting Australia’s Biggest Banks – But Not Kiwi Consumers.
That’s not to rubbish the Minister’s claim to be bringing common sense to his legislative chores on this matter..
It may well be common sense to protect the Aussie banks at the expense of their Kiwi customers, although it would be great to hear him questioned on the matter, because Scott Russell is leading the class action against the ASB and ANZ banks.
Russell contends
“…the retrospective legislation designed to protect the Australian-owned banks is a slap in the face for kiwi bank users”.
In his statement, Scott Simpson said the Government has taken “a major step toward restoring common sense to financial regulation, with the first readings of three important reform bills”.
“Our Government is delivering on its promise to make it easier for New Zealanders to access the financial services they need, whether it’s buying a home, growing a business, or simply managing everyday life,” says Mr Simpson.
“For too long, New Zealanders have been trapped by rules that are overly bureaucratic, unnecessarily repetitive, and sometimes just downright silly. Today, we’ve begun to fix that.”
The Credit Contracts and Consumer Finance Amendment Bill, the Financial Markets Conduct Amendment Bill, and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill are the first legislative steps in a broader package aimed at rewiring New Zealand’s financial services regulation. Together, they form part of a comprehensive overhaul that- Scott Simpson insists – will rebalance the system to ensure consumer protection without stifling access to credit or innovation.
“For many Kiwis, the absurdity of past rules became clear when banks were forced to quiz them about what they’d been spending on takeaways or Netflix subscriptions before approving a mortgage. That wasn’t responsible lending, it was regulatory overreach.”
The three bills “focus on addressing some of the most counterproductive aspects of the current law”:
- Regulators empowered to take proactive action: The Financial Markets Authority will be given the tools needed to effectively oversee lending, banking and insurance markets to the benefit of consumers.
- Removing unnecessary personal liability: Senior managers and directors will no longer face personal liability for compliance failures. Responsibility will sit with the businesses, where it belongs.
- Streamlining licensing requirements: Financial service providers will no longer need to hold multiple overlapping conduct licences, reducing duplication and compliance costs across the sector.
- Improving dispute resolution services: The Bill strengthens oversight and independent governance of financial dispute resolution schemes, ensuring Kiwis can have confidence in fair, effective support when things go wrong.
- A fairer and more proportionate approach to non-disclosures: Another change, which will apply retrospectively for the period between 2015 and 2019, will enable the courts to apply greater discretion when a lender has failed to disclose certain information to consumers.
A Government fact sheet for the Bills is here.
In his media statement, Scott Russell says the first reading of the Credit Contracts and Consumer Finance Amendment Bill reveals the Government’s concerning willingness to rewrite the law – not to protect consumers, but to protect two of Australia’s biggest, most profitable banks.
“This Bill is not law reform. This is a blatant attempt to let ANZ and ASB off the hook – after they broke the law, after they admitted to it, and while they are facing a live court case brought by more than 150,000 ordinary New Zealanders,” said Scott Russell, lawyer leading the class action against the two banks.
The proposed changes are retrospective. They will reach back in time to extinguish existing legal rights and override the courts – simply to ensure two powerful banks don’t have to return hundreds of millions of dollars in unlawfully charged interest and fees.
“Let’s be clear: this is a calculated move that undermines the rule of law, favours corporate power over public interest, and tells every consumer in this country that if you’re up against a big enough opponent, the Government will change the rules to suit them,” said Russell.
The banks’ breaches were not trivial, Russell insists.
“ They failed to meet important disclosure obligations – laws specifically designed to ensure transparency and fairness for kiwi borrowers. These aren’t optional standards. They are core protections, and when they’re broken, the law rightly provides a remedy.
“Now, that remedy is being stripped away – not because it was wrong, but because ANZ and ASB simply don’t want to pay them.”
Russell describes the two banks as the most profitable in New Zealand.
“They made billions while failing to meet legal obligations, and now they want a bespoke legislative fix to avoid being held accountable,” Russell said.
If the Government believes the law is problematic, then it should legislate for the future, he said.
It should not retroactively rewrite the law to protect the banks from the consequences of their actions – especially when the case has been before the courts for over four years.
Russell regards the implications as “profound”.
Retrospective law changes erode public confidence in the justice system, telling consumers their rights are conditional and telling businesses that lobbying can replace accountability.
And they confirm that in New Zealand, power and profit can override principle.
Bob Edlin is a veteran journalist and editor for the Point of Order blog HERE. - where this article was sourced.
1 comment:
When you think of the revolving door between government and board positions on the banks, only an idiot would expect the law change to support the general public.
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