by frog
Sue Bradford hosted the launch of Finsec‘s Fairness in Lending Report this morning at Parliament. The report promotes a reforming and regulating the financial sector by establishing a lending code and code of social responsibility for all financial institutions, not just banks. These codes will be a new watchdog agency with a broad systematic overview of the financial industry. Sue welcomed the proposals and called for much greater community influence on our financial sector policy to help those caught in unwanted debt.
The Dominion Post noted this morning that household debt was at historic highs and quoted Finsec as saying:
“Accumulating evidence suggests that many non-bank lenders, and banks, have been indulging in lending practices of a questionable ethical nature.”
In particular, Finsec was concerned that many lenders were marketing credit facilities to people with inadequate regard to their ability to understand the risks they were taking by borrowing, or their ability to service the debt.
Bank workers were also being forced to push debt by having their salaries linked to sales targets and by being pressured to sell to family and friends outside work hours.
At the launch Finsec talked about how the BNZ refused to consult with the local Hokitika community over its recent decision to close its Hokitika branch. Branch closures like this have helped ‘fringe’ lenders to move into communities in much greater numbers than the past.
Claire Dale from the Child Poverty Action Group said banking should be viewed as an essential service like water and other utilities, and that people needed access to fair banking facilities. She said there was clear conflict of interest that bank staff were forced to confront when they were asked to give good financial advice to their customers but also pressured to meet performance targets that encouraged selling debt.
And Westpac worker Maxine Mullen discussed the practice in some banks of ‘shame boards’ – whiteboards with each workers’ name on it, that recorded who had and had not reached sales target for the week. Those who did not reach target were pressured to shape up or ship out. Finsec staff gave an example of one staff member who had to sell a credit card to their grandmother at 4.50pm on Friday at the end of the month to help the branch meet target.
on the trolls and those who are unable to keep on topic
Once again we see more nanny state policies from the Greens, just when will you guys get the message that the people want LESS government not more.
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Alternatively, people could just learn how to say….
Wait for it….
Wait for it….
“No, thanks”.
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Yes, the Greens want more laws to protect the stupid and inept from themselves – Nanny State indeed.
Do you want people to never learn from their mistakes, to have everyone treated like the lowest common denominator, too stupid to make up their own minds?
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There is no doubt in my mind that banks do indulge in questionable practices. They seem to prey on carelessness as well as stupidity and ignorance, and don’t provide the information needed by their customers.
On one occassion, I have failed to transfer money from one account to my cheque account in time (having temporarily lost track of some of the automatic withdrawls from my cheque account), so the account went into overdraft for a couple of days. The bank charged me interest – fair enough – then dishonoured the payment and charged me a dishonour fee. Had they dishonoured it straight away, I wouldn’t have been charged the interest, so they had their cake and ate it too!
They also change their account fee schedules so some (or is that most?) customers end up paying more, but those customers could save money by going into the bank and changing their accounts. As if we had time!
I welcome laws that protect the stupid, inept, overworked and careless from predators.
Trevor.
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Trevor
If you don’t like the heat, get out of the kitchen.
There are plenty of places you can live where what you do and how you do it are dictated by the state.. China is popular right now and have plenty of jobs for native English speakers. Me? I’d rather live my own life thank you, and not be so lazy as to avoid a little work on what bank and/or account type best suits my circumstances.
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Frog – you posted
>
>>banking should be viewed as an essential service like water and other utilities, and that people needed access to fair banking facilities.
There are three domestic institutions where these services can be secured, TSB, PSIS and KiwiBank. KiwiBank in particular cold be viewed as a “public service’ because I, like the rest of taxpayers, am funding it. There is no monopoly of banking, everyone is free to select the provider of choice, just as they are for other things in the market.
The provision of water isn’t fair – unless you have a metre and pay by use small households subsidise big ones. The provision of many forms of Art isn’t fair, those of us who don’t value Ballet subsidise those who do. The provision of street cleaning isn’t fair, my street hasn’t been cleaned by the council in the many years I’ve lived there where as some people get their streets swept and washed several times a week. LIFE ISN’T FAIR, and so we must all do the best we can in a society that isn’t ordered just for us, but for a broad spectrum of perspectives on what is ‘fair’.
Again – this reeks of attraction to a communist state, where the queues for food were fair, because everyone had to get into them, and if you were too far down to get supplies that was fair too!
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I for one welcome our new communist-green-nanny state overlords.
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Interesting comments. But they miss the point.
For those who have been living in a cave with no news service or contact with other people we are right now in the middle of a world wide financial crises bought about by the careless use, by banks, of other people’s money.
We are not immune in Aotearoa because our banking system is largely controlled by Austrailian banks who, it now appears, could not resist putting their customers money into the sorts of financial structures involved in the collapse. It does not look likely that the Austrailian banking system is in serious trouble but it is not impossible. Should the Australian banks get near to collapse we will suffer terribly.
My point is, and the point of the Green MP and FINSEC is that banks cannot just be left to themselves to make their own rules.
The people commenting that it is up to the bank customers to say “no thanks” show they do not understand the way that economic power works. The banks have lots and lots of it, and most customers have close to none.
Left to their own devices, and in a free market, the banks will happilly ruin small customers if it turns a profit. They will lend money for any purpose if the loan is secured.
There is a point of view that this is dawinian selection and the stupid should suffer. But that is a callous view that no body with a social conscience could subscribe to.
So until human nature changes, and we all decide to just be nice (soon I hope) we need the state to protect the weak from the strong, the powerless from the powerful.
Perhaps it ios a “nanny state”. What it is called does not change what it is, and a bit of “nanny state” is the price we pay for a free society that we can stand to be part of.
If there is an alternative that could work, let’s hear it. But till then people with a lot of economic power will find the state interferes in the way that power is used.
peace
W
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This issue is being attacked on a number of fronts
Stirring the Pot
http://www.businessday.co.nz/blog/stirringthepot
and (eg)
http://www.interest.co.nz/ratesblog/index.php/2008/08/09/richmastery-admits-plagiarising-parts-of-books/
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