1 00:00:00,120 --> 00:00:02,480 Speaker 1: Am Z has said no thanks to an offer to 2 00:00:02,520 --> 00:00:05,360 Speaker 1: settle a class action lawsuit for the core price of 3 00:00:05,480 --> 00:00:09,160 Speaker 1: three hundred million New Zealand dollars. Plaintiffs offered a deal 4 00:00:09,200 --> 00:00:12,160 Speaker 1: to both am Z and ASB. ASB Z to respond 5 00:00:12,160 --> 00:00:14,960 Speaker 1: to the proposal, but am Z has said that genetip 6 00:00:15,040 --> 00:00:17,520 Speaker 1: Training is the heralds Wellington Business editor and is with 7 00:00:17,640 --> 00:00:21,599 Speaker 1: me now hyjene hey Ryan. So how would this deal 8 00:00:21,760 --> 00:00:25,119 Speaker 1: work exactly? Am Z and ASB would both individually be 9 00:00:25,280 --> 00:00:27,760 Speaker 1: on the hook for three hundred million or is it together? 10 00:00:28,880 --> 00:00:32,760 Speaker 2: It's three hundred million each. So A and Z has 11 00:00:32,760 --> 00:00:39,400 Speaker 2: said no thanks. ASB is still considering it. Basically, under 12 00:00:39,440 --> 00:00:44,160 Speaker 2: the current law they could actually be liable for much 13 00:00:44,200 --> 00:00:46,880 Speaker 2: more than that. It could be more than six hundred 14 00:00:46,960 --> 00:00:50,680 Speaker 2: million combined. But the controversial thing here is that the 15 00:00:50,720 --> 00:00:54,200 Speaker 2: government is changing the law in such a way that 16 00:00:54,640 --> 00:00:58,120 Speaker 2: the banks could be liable for much less, much less 17 00:00:58,120 --> 00:01:01,000 Speaker 2: than even six hundred million. So that's the big issue 18 00:01:01,000 --> 00:01:04,720 Speaker 2: here because normally when governments change the law, it's changing 19 00:01:04,720 --> 00:01:07,000 Speaker 2: the law for the future. But the thing here is 20 00:01:07,000 --> 00:01:09,720 Speaker 2: that they wanting to change the law to the way 21 00:01:09,760 --> 00:01:13,600 Speaker 2: it's applied to the past, specifically to a period between 22 00:01:14,080 --> 00:01:17,920 Speaker 2: twenty fifteen and twenty nineteen, so that's when the breaches 23 00:01:17,959 --> 00:01:19,600 Speaker 2: around this court case happened. 24 00:01:20,360 --> 00:01:24,919 Speaker 1: Yes, so retrospective law that could completely put the kibosh 25 00:01:25,080 --> 00:01:27,560 Speaker 1: on this case that they're taking right. 26 00:01:28,000 --> 00:01:30,800 Speaker 2: Well kind of. So under the current law, if banks 27 00:01:31,319 --> 00:01:35,320 Speaker 2: just disclose the wrong information about your loan, the starting 28 00:01:35,319 --> 00:01:37,240 Speaker 2: point for the penalty is that they have to repay 29 00:01:37,319 --> 00:01:40,279 Speaker 2: you all your borrowing costs for the time of the breach. 30 00:01:40,640 --> 00:01:42,360 Speaker 2: So you know, in this case there could be about 31 00:01:42,360 --> 00:01:45,200 Speaker 2: one hundred and fifty thousand people involved, I think of 32 00:01:45,240 --> 00:01:47,559 Speaker 2: all the interests they've paid over the time of a breach. 33 00:01:47,720 --> 00:01:50,600 Speaker 2: But you know that that could really mount up. The 34 00:01:50,640 --> 00:01:52,920 Speaker 2: way the government wants to change the law is to 35 00:01:52,920 --> 00:01:55,880 Speaker 2: say that the judge has can have discretion to have 36 00:01:55,880 --> 00:01:59,360 Speaker 2: a proportionate penalty, so to have a fair penalty. So 37 00:01:59,520 --> 00:02:03,000 Speaker 2: you know, in this case, if under the proposed new law, 38 00:02:03,040 --> 00:02:04,680 Speaker 2: for the judge looks at it and says, oh, actually, 39 00:02:04,680 --> 00:02:07,160 Speaker 2: this was really bad, the banks could still face a 40 00:02:07,160 --> 00:02:09,720 Speaker 2: really big penalty, or the judge could go, oh, it's 41 00:02:09,760 --> 00:02:12,480 Speaker 2: not that bad. Actually, you know what, We're sure a 42 00:02:12,480 --> 00:02:16,200 Speaker 2: smaller penalty. Now the banks have already actually reimbursed customers 43 00:02:16,440 --> 00:02:18,880 Speaker 2: for the losses because of the mistakes sort of in 44 00:02:18,919 --> 00:02:22,320 Speaker 2: the order of about forty million dollars. So you know, 45 00:02:22,639 --> 00:02:26,880 Speaker 2: the amount that it could be under the existing law 46 00:02:27,400 --> 00:02:29,400 Speaker 2: is much larger than the forty million. 47 00:02:29,760 --> 00:02:32,000 Speaker 1: The Government's obviously trying to get these changes through the 48 00:02:32,800 --> 00:02:35,160 Speaker 1: at the moment being heard in Select committee this week. 49 00:02:35,440 --> 00:02:38,760 Speaker 1: Act in New Zealand First on board with the retrospective 50 00:02:38,800 --> 00:02:39,320 Speaker 1: part of it. 51 00:02:40,080 --> 00:02:43,040 Speaker 2: Well, they have their reservations. I spoke to New Zealand 52 00:02:43,080 --> 00:02:46,320 Speaker 2: First Shane Jones today and he said, you know, he 53 00:02:46,320 --> 00:02:49,480 Speaker 2: wouldn't judge jump to conclusions, but it's very very bad 54 00:02:49,520 --> 00:02:54,520 Speaker 2: practice to change something retrospectively. He said that New Zealand 55 00:02:54,560 --> 00:02:57,359 Speaker 2: First would you know, still have a think about whether 56 00:02:57,360 --> 00:02:59,880 Speaker 2: it would support the bill, you know, further down the 57 00:03:01,040 --> 00:03:06,200 Speaker 2: parliamentary process. Acts David Seymour, he said he actually wrote 58 00:03:06,240 --> 00:03:09,840 Speaker 2: to Scott Simpson, the Minister, and raised his concerns, but 59 00:03:10,080 --> 00:03:12,120 Speaker 2: David Seymour said, he's part of the government and you 60 00:03:12,160 --> 00:03:15,320 Speaker 2: know we'll kind of go along with you know, he's 61 00:03:15,360 --> 00:03:18,079 Speaker 2: not going to kick up a stink necessarily. So I 62 00:03:18,120 --> 00:03:21,880 Speaker 2: think there's still, you know, some uncertainty there. It's interesting 63 00:03:21,880 --> 00:03:24,880 Speaker 2: here because there's so much money at stake, you know, 64 00:03:25,040 --> 00:03:30,200 Speaker 2: banks massive players. They're lobbing hard. The lawyers who are 65 00:03:30,200 --> 00:03:32,440 Speaker 2: bringing the class action forward, there's a lot for them 66 00:03:32,480 --> 00:03:34,520 Speaker 2: to gain as well. The funders of the class action. 67 00:03:34,880 --> 00:03:37,960 Speaker 2: They are pushing really hard. It's going to be interesting 68 00:03:38,000 --> 00:03:42,280 Speaker 2: to see which way the politicians end up end up going, yeah, what. 69 00:03:42,240 --> 00:03:45,680 Speaker 1: Have you made of the submission so far on this committee? 70 00:03:45,960 --> 00:03:49,880 Speaker 2: Well, sitting in Select committee today, and they're pretty passionate. Again, 71 00:03:49,920 --> 00:03:52,360 Speaker 2: I think it's because there's a lot of money at stake. 72 00:03:53,560 --> 00:03:56,240 Speaker 2: You know, on the one hand, it's fair that they're 73 00:03:56,400 --> 00:03:58,840 Speaker 2: large penalties for banks because you know, if you're just 74 00:03:59,320 --> 00:04:01,720 Speaker 2: a person, are you meant to go through your mortgage 75 00:04:01,720 --> 00:04:04,040 Speaker 2: contract with a fine tooth comb and make sure all 76 00:04:04,080 --> 00:04:07,160 Speaker 2: the details are correct? So that's a fair fair argument. 77 00:04:07,520 --> 00:04:10,640 Speaker 2: But then you know, the banks say, if the penalties 78 00:04:10,680 --> 00:04:13,160 Speaker 2: are too heavy handed, that could cripple them, like it 79 00:04:13,240 --> 00:04:15,520 Speaker 2: won't cripple A and Z and ASP, but it could 80 00:04:15,520 --> 00:04:18,520 Speaker 2: cripple some smaller lenders. So there are some pretty strong 81 00:04:18,600 --> 00:04:22,880 Speaker 2: arguments I think being made. And the retrospectivity element is 82 00:04:23,120 --> 00:04:25,440 Speaker 2: it's just not good. No, you can't pull the rug 83 00:04:25,440 --> 00:04:26,400 Speaker 2: out from beneath people. 84 00:04:26,680 --> 00:04:30,000 Speaker 1: That doesn't seem fear does that. But that's obviously what 85 00:04:30,000 --> 00:04:31,960 Speaker 1: they're what they're trying to weigh up at the moment, Janay, 86 00:04:31,960 --> 00:04:34,960 Speaker 1: I appreciate your time tonight, Janet to Trainey, the Herald's 87 00:04:34,960 --> 00:04:38,640 Speaker 1: Wellington Business editor, with us for more from Heather Duplessy 88 00:04:38,720 --> 00:04:41,840 Speaker 1: Allen Drive. Listen live to news talks'd be from four 89 00:04:41,880 --> 00:04:45,200 Speaker 1: pm weekdays, or follow the podcast on iHeartRadio.