Scott Russell: lawyer on the proposed changes to NZ lending laws and the ensuing lawsuit

Lawyer Scott Russell says proposed changes to our lending laws only benefit Aussie banks. 

The bill, currently before Select Committee, aims to lessen red tape for such things as adjusting credit limits and applying for credit cards. 

Russell's representing 170,000 Kiwis in a class action against ANZ and ASB, and says the changes protect those banks. 

He says they argue penalties under the law are a risk to the economy. 

"That's just simply rubbish, there's no evidence of that and it seems the suspicion is, by many, that the law is just National helping out the Australian banks."

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Episode Transcript

Speaker 1 (00:00):
There are calls on the government to back off changing
the law to protect Bagassi banks. One hundred and seventy
thousand Kiwis are in a class action against ASB and
A and Z Allegedly these two banks breached respondible responsible
lending regulations. The only trouble is the government's about to
pass a piece of legislation that will unwind all of that.
Scott Russell is leading the class action and is with us. Now, Hey, Scott,

(00:21):
hi Heather, why is the government changing the law to
wipe these guys responsibilities here?

Speaker 2 (00:27):
It's a good question. We can't understand that either aims
in ASB is saying that generally's under the law potentially
presents an existential risk to the economy. What we're saying
is that's just simply rubbish. There's no evidence of that,
and it seems the suspicion is that by mending the
law it's just national helping out the Australian banks in

(00:49):
this case.

Speaker 1 (00:50):
Have the banks just lobbied them hard.

Speaker 2 (00:53):
Seems to be the way. We've actually sought information from
NB and in the ministers about that lobbying and we
been rejected that that's been withheld from us. So we're
not able to see why this law has actually come
into place.

Speaker 1 (01:07):
How much is each of these people You've got one
hundred and seventy thousand kiwis in this class action. How
much is each of them potentially standing to get from
the banks?

Speaker 2 (01:16):
I can't representative plaintiffs. A due between sort of seven, ten,
fifteen thousand dollars each depends on the size of your
loan and the amount of interest you are paying over
the time period. But our estimate is it's going to
be in the hundreds of millions of dollars that ordinary
kiwis are due and compensation from their banks.

Speaker 1 (01:36):
Okay, hundreds of million dollars, millions of dollars split between
the two banks.

Speaker 2 (01:40):
Yeah, that's correct.

Speaker 1 (01:42):
I mean, what's the existential threat? Those guys make what
like a billion dollars at a time in a year.

Speaker 2 (01:48):
Well, that's what we're trying to work out as well,
because when you look at their balance sheets, they're making
over a billion dollars each year, which is flying straight
back into the Australian parent companies, which actually make almost
ten billion dollars the year.

Speaker 1 (02:01):
Okay, what are the chances, like, how long have you
got to fight this before this piece of legislation has passed.

Speaker 2 (02:08):
What was in just introduced to the House and it's
going to select committees shortly. So we're going to fight
it tooth and now the whole way because we just
don't think it's it's fair and we don't think it
api applies with the rule of law in New Zealand.
It's not what New Zealand's about.

Speaker 1 (02:22):
What are the chances do you think who's the minister,
is it Scott Simpson? Now, Scott Simpson, yeahs commerce What
are the chances that he backs off?

Speaker 2 (02:31):
I think pretty high. It doesn't even reading the Parliamentary
the legislation in Parliament, it says retrospectivity should not be
should not apply to any law. And they actually in
this new law have put in a little clause that
says the normal rules under the legislation don't apply to this.

Speaker 1 (02:53):
All right, Scott, listen, thanks very much. I really appreciate
you talking us through. A best of luck fighting that
because it seems a no brainer. This is bizarre, isn't it.
Scott Russell, Director at Russell van Hout Goodness, I don't know,
by the way, put that one in for a chat
with Nikola Willis on Monday when she's with us on
the show, we'll ask her about that, because this seems
like a weird one that it's gonna be a hard
one for the government to defend because it comes down

(03:14):
to it's simply you're taking the side of four well,
in this case, two Australian banks against one hundred and
seventy thousand kiwis. How do you justify that? I'd love
to know the answer. For more from Heather Duplessy Allen Drive,
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