Jenee Tibshraeny: NZ Herald Wellington business editor on the new reports claiming the Banking Association lobbied the Government

New reports reveal the Government did get lobbied by the Banking Association over a proposed law change to prevent costly class action lawsuits.

Minister Scott Simpson claimed this wasn't the case earlier - and claimed the banks hadn't called for it. 

NZ Herald Wellington business editor Jenee Tibshraeny explains further.

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Episode Transcript

Speaker 1 (00:00):
It turns out that the government did get lobbied by
the Banking Association to make a law change to prevent
potentially costly law action class action lawsuits. You know, we've
been talking about this government's going to change things retrospectively
so a couple of Australian banks don't have to potentially
pay out fines to Kiwi customers in this class action.
Last month, the Minister now Responsible Scotsson told us the

(00:20):
banks hadn't called for this. I've met with the Bankers
Association and they aren't calling for it. I mean, come
off at why would you people be making this change
if it wasn't for the fact that the banks wanted it.

Speaker 2 (00:31):
Well, well you might think that here th.

Speaker 1 (00:34):
Gene Tibschraney is The Herald's Wellington Business editor who's been
looking into this and with us. Now hey, you know,
hey Heather, now what's going on here? Is he just
not across the detail?

Speaker 2 (00:43):
Well, you know that would be the generous view of this.
The government most definitely was lobbied by the banks. The
banks have for years wanted the government to change the
way the law is applied to a period between twenty
fifteen and twenty nineteen, so that if the banks are

(01:05):
taken to court for failing to disclose the right information
about loans to their customers, so that the penalty that
the banks face isn't too high. As it stands, banks
have to reimburse customers all their interest costs and fees
for the period of the breach, regardless of how serious

(01:27):
that breach is. The banks don't like that because of
course it exposes them to you know, like potentially hundreds
of millions of dollars in costs. So they've been calling
for this change now. Actually, interestingly, yesterday we got a
bunch of documents from the government. We can see that
about a year ago the bank's association wrote to the
minister specifically to say can you please make this change,

(01:52):
and then later throughout the year last year the Ministry
MB officials met with ASB and A and zed the
two banks that have been taken to court to get
their two cents on this issue. So when Scott Symptom
says they weren't lobbied, they most definitely were.

Speaker 1 (02:09):
Well, of course they were. I mean in anybody with
any inside, like anybody who understands how these things work,
which is pretty much everybody would understand that asked for it.
But I mean, am I, there is the outside possibility
that it was Andrew Bailey, who was the previous minister,
who was lobbied, And there is an outside possibility that's
somewhere along the line in the handover from Andrew to Scott.

(02:31):
Scott just didn't realize the banks that asked for it.
Am I being too generous?

Speaker 2 (02:35):
I mean, that is quite possibly what happened. But you know,
it is worrying because you know, that would suggest that
he's making this law change which has quite severe consequences,
like the penalties that the two banks face could be
in the hundreds of millions of dollars. It's a lot
of money. Yes, to think that he's making a change
like that without sort of understanding the broader context or

(02:58):
the different players involved is concerning.

Speaker 1 (03:02):
It is concerning, and I'm starting to see a little
bit of a pattern of this emerging with Scott Simpson. Now,
I can't imagine that the lawyer who is representing the
kei We clients in the class action is stoked about
this revelation.

Speaker 2 (03:13):
Yeah, exactly. I actually just talked to him, Scott Russell.
He is sort of disgusted by this situation because you know,
it's it's fine if officials talk to banks, that's all good.
But you'd think that they'd talk to the other side
as well. You'd think that they'd talk to him, and
they didn't do that. Now you might just think, well,
they didn't think to call him up, why should they?

(03:35):
But he specifically emailed MB a few days before the
Bankers Association emailed Andrew Bailey saying that he was interested
in this issue. Scott Russell, you know, specifically asked them,
are you considering making this law change retrospective, because of
course that would affect the court case that he's involved with.

(03:56):
An MB official said no. So in June last year
they said no. You know, a few days later the
bankers email and say can you look into this thing?
They end up looking into it, they end up making
the change, and the first the public knows of this
is when the government introduces the bill to Parliament in
March this year. So all this stuff was happening behind

(04:18):
closed doors. We didn't know about it until it happened. Now.
Scott Russell is obviously not happy about that.

Speaker 1 (04:24):
Yeah, I can imagine Jannay, thank you so much, really
appreciate your insight. Jane tub Trainey, the Herald's Wellington Business editor.
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