Government Reaches Compromise on Changes to Consumer Finance Law

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Government Reaches Compromise on Changes to Consumer Finance Law

The New Zealand government has reached a compromise regarding amendments to the Credit Contracts and Consumer Finance Act. The recent changes exclude ongoing class action lawsuits against banks from its provisions. This decision specifically affects the ongoing legal case against ANZ Bank.

Key Details of the Amendment

The amendment aims to address disclosure breaches that occurred between 2015 and 2019. It seeks to provide a retrospective fix that allows banks to avoid blanket penalties for these violations. The move follows recent legal developments in which ASB settled a separate class action for approximately $136 million earlier this month.

Impact on ANZ Bank

Despite the government’s efforts to rectify the situation, the ongoing case against ANZ Bank will continue in the courts. Commerce and Consumer Affairs Minister Scott Simpson expressed that while retrospective law changes are rare, they are justified in this instance. He noted that the Finance and Expenditure Committee recommended excluding ongoing court cases from these amendments.

Reactions from Stakeholders

  • ANZ Bank expressed disappointment over the exclusion of its case, arguing it creates inconsistency in the application of the law.
  • The bank’s CEO, Antonia Watson, stated that it is unfair that the law change does not apply equally to all cases.
  • Watson stressed the importance of fairness in legal processes, particularly concerning laws deemed potentially flawed by Parliament.

ANZ Bank has maintained confidence in its legal position and looks forward to a resolution through the court system. This ongoing legal battle underscores the complexities and challenges of consumer finance regulations in New Zealand, emphasizing the importance of transparent and fair practices in the banking sector.

Conclusion

The government’s recent compromise highlights the balance between reforming outdated laws and maintaining justice for consumers. The exclusion of ongoing cases such as that against ANZ raises significant discussions around fairness in legislative measures and the impact on consumers and banks alike.