Month: August 2019

In its submission on the Farm Debt Mediation Bill presented to the Primary Production Select Committee the Bankers Association said it supports the Bill, which has the potential to shorten the amount of time taken to get a resolution and avoid the need for creditor enforcement.

New Zealand Bankers’ Association chief executive Roger Beaumont suggested the policy was needless as New Zealand currently has “one of the fastest bank switching processes in the world”.

The Bankers’ Association highlighted in its submission: “continual discussions and negotiations between lenders and with their farming customers is the norm in a banking relationship and in the event there is a dispute that warrants having a formal process with an independent “circuit breaker” involved, members would actively encourage mediation (regardless of the statutory scheme)”.

New Zealand Bankers’ Association chief executive Roger Beaumont confirmed that banks might shorten mortgage for properties that are at risk. He also raised the issue of insurance, saying without insurance banks won’t approve a home loan. 

“It’s a good idea to calculate the potential interest rate savings for the balance of the fixed period against the break cost. Then you can make a carefully considered decision and not just chase a cheaper rate. Your bank should be able to help with this comparison.”

Bankers’ Association chief executive Roger Beaumont said it was up to each bank as to how it responded if the rules come into effect. “Our independent economic analysis suggests there will likely be tightening of lending in some parts of the economy such as small business and agriculture.”