An open letter to New Zealand Members of Parliament: Banking conduct in New Zealand

“We’re going to live in the truck?” Cool..!”

Hello

On 5 November the Financial Markets Authority and the Reserve Bank released their joint report into bank conduct and culture in New Zealand On 15 November they released another report into bank incentive structures. Both reports are highly critical of banks’ conduct in New Zealand, find most if not all wanting in terms of their culture and conduct, measures in place to mitigate poor conduct, and the responsibilities of senior bank officers and of boards.

While everyone seems to accept the findings of the reports, no one yet seems to want to ask the questions around making it right. ANZ New Zealand posted a profit of $1.99 billion in the last twelve months, that’s around $5.4 million dollars a day – profit! Should ANZ be required to allocate a proportion of its profits to making it right for the New Zealander who, to be blunt about it,have been screwed by the greed of ANZ and other banks? ANZ was quite happy to incentivise and pressure its staff into making sales that should never have proceeded and now it needs to make this right.

In 2004, I guaranteed my partner’s company for a house for our daughter when we moved away. That property was sold in 2005 and I thought nothing more of it. At the same time my partner was recovering from a serious head injury. When she was working her income was less than $50k a year and income from her company was limited, less than $10k a year. Still ANZ, from 2005-2009, extended credit to her that, by the time I found out about it at the end of 2013, had accrued to $408k. I don’t not believe that she is responsible for her actions in this period. If I did, then I would be taking the appropriate actions.

When I challenged ANZ over this, it said that it had no authority to discuss this with me. That was not true: the loan documents include a specific clause enabling disclosure to guarantors and the Privacy Commissioner also ruled in 2012 that this sort of information can be considered personal information for the guarantor. ANZ said that the Credit Contracts and Consumer Finance Act (CCCFA) prevented it disclosing this information.Again, this is untrue: this Act only applies to personal lending and does not mention company lending at all. To support its position that guarantees are treated differently that security, ANZ then made up information that it attributed to the Code of Banking Practice. Even if that Code did say that, ANZ’s guarantee and loan documents clearly define security as including guarantees.

Under the Code of Banking Practice, ANZ has an obligation to only extend credit if it is satisfied that the person borrowing the money can reasonably pay it back. Under the same Code it also has an obligation to tell people who have offered guarantees and other security of new or additional lending against that guarantee or other forms of security.  The Code also includes a general obligation for banks to act fairly, reasonably, ethically and consistently. While we might agree that they are consistent in their conduct towards customers, the recent reports from the FMA and Reserve Bank find that ANZ et al fall short in acting fairly, ethically and reasonably. Who will hold them to account for their actions?

The reports find the regulatory frameworks in New Zealand for banking are weak. In part this may be due to gaps in legislation and culture of ‘not our problem’ – have a look and see how many  government agencies with a regulatory output have more content on their websites about what they don’t do versus what they actually do. From my experience with these agencies, this is largely due to inadequate leadership and an unwillingness to get into the fight. Nowhere is this more apparent that within the Office of the Banking Ombudsman. Although not part of Government – something I hope you will consider changing – this office should be the primary watchdog to safeguard ordinary New Zealanders against predatory banks like ANZ.

In November 2016, I submitted a detail complaint (attached)with support documentation to Office of the Banking Ombudsman which initially rejected it out of hand. After three months, it produced a single page response(attached) that did not address any of the issues raised. Acting on advice from the Office of the (real) Ombudsman this year, I submitted a complaint to the chair of the Board of the Banking Ombudsman. Although she did appoint a QC to review my case, he was specifically limited to only review the process applied by the Banking Ombudsman and not the actual issues raised.

ANZ was scheduled to forcibly auction my home on 8 November.I cooperated fully with the real estate agent as, if the sale proceeded, it was in my best interests as much as ANZ’s for the auction to achieve the best possible result. That auction was cancelled an hour before it was due to proceed. I believe that ANZ did this to prevent 1 News screening a story on the auction that night. ANZ did not communicate with me at any time to advice of the cancellation, the reasons for the cancellation or what would be happening next. A week later, the real estate agent called me in tears after she had found out my home was instead to be sold by auction. I don’t believe that I was meant to know about this til it was a done deal. That tender closes 4PM Friday 30 November.

There is probably not much that can be done to deter ANZ from its course this time. Like most bullies, the only things that put it off are a good hard punch to the nose, or being publicly embarrassed. To that end, if you would like to help, please do not go off and punch a banker. Instead, you might wish to ask the Banking Ombudsman or ANZ if they would like to offer some comment on the issues raised in the attached complaint (sorry, it is a bit chunky as there are a lot of issues) or ANZ’s conduct since I first challenged it in 2013 (yes,five years ago) and over its conduct of the tender.

Contacts for the Banking Ombudsman are Nicola Sladden nicola.sladden@bankomb.org.nzor for the chair of the Board, Miriam Dean miriam.dean@barrists.co.nz. Unfortunately I do not have any direct contacts with ANZ other than to direct you towards its totally inappropriately named Customer Financial Well-being Unit.

Longer term, please consider how best predatory corporates like ANZ New Zealand can be held accountable and required to make good, as best they can, the damage their greed has done to so many ordinary New Zealanders.

My suggestions are that we

  • bring the Office of the Banking Ombudsman in as an arm of Government; 
  • ensure that other regulatory agencies like the FMA and Commerce Commission are both empowered and energised to pursue errant corporates; and, most of all,
  • establish a Royal Commission to peel off the scab of banking in New Zealand. I do not believe for one second that the Tasman Sea is a barrier adequate to protect us from the behaviours now being exposed by the Australian Banking Royal Commission.  

Thank you

Simon O’Neill

(yes, the rescue helicopter guy)

In Raurimu (for now)

When the sun shines again…

The One Where Banking Ombudsman Changes Her Tune

Following on from Cover Me

Covering Fire

Throughout ANZ New Zealand has relied on the Banking Ombudsman as the linch-pin of its defence. It really needs a better linch-pin. The Banking Ombudsman (Nicola Sladden nicola.sladden@bankomb.org.nz) and the Chair of the Banking Ombudsman board (Miriam Dean miriam.dean@barrists.co.nz) have consistently avoided the issues at the core of this dispute.

Nicola Sladden nicola.sladden@bankomb.org.nz

All off the record, of course, like anything is ever really off the record, but I understand that some of Nicola’s responses to media inquiries have not been consistent with her formal findings in this case. Once the weak link goes…

Miriam Dean miriam.dean@barrists.co.nz

These are the questions that Miriam and Nicola do not want to answer and that should be put to them:

Question 1

ANZ New Zealand’s guarantee and loan documents include guarantees as forms of security. The Code of Banking Practice (until the May 2018 version) says that banks have to provide any party providing security of the details of any lending against that security. This includes 

  • the annual interest rate and whether it may be changed during the period of the credit facility;
  • all fees and charges (including government charges and taxes);
  • the period for which the credit facility is available;
  • the repayment terms, including any terms relating to early repayment costs.

If banks take the Code of Banking Practice seriously – and it’s the Banking Ombudsman’s job to make sure that they do – why didn’t ANZ tell me about all the extra lending to my ex-wife’s company?

Question 2

Why was the Banking Ombudsman not concerned when:

  • ANZ New Zealand said that it had no authority to disclose information to me – when it did have that authority and a previous determination by the Privacy Commissioner also said that it should disclose this information.
  • ANZ New Zealand said that the Credit Contracts and Consumer Finance Act 2003 prevented disclosure to me. The truth is that this Act, by definition, only covers personal lending and does not even mention company lending.
  • ANZ New Zealand made up information that it attributed to the Code of Banking Practice to support its position that it did not have to disclose details of additional lending to guarantors.

Question 3

The Code says that ANZ New Zealand can only provide credit or increase credit limits when the information available to it leads it to believe the customer will be able to meet the terms of the credit facility (that means, repay the loan). The Banking Ombudsman has held banks accountable under this obligation in its case notes.

Why didn’t the Banking Ombudsman consider this obligation when ANZ loaned hundreds of thousands of dollars to a small company with a weekly  income of less than $200 (that’s what ANZ New Zealand CEO Dave earns in about 8 1/2 minutes)?

Question 4

The Code requires banks to act fairly and reasonably, in a consistent and ethical way.

Nicola and Miriam, could you please tell us how ANZ New Zealand’s conduct in this issue could ever be considered fair, reasonable or ethical? Yes, we might give ANZ New Zealand points for consistency but that’s not always a good thing. ISO 9001 just means you can do things badly all the time…

…and just as an aside, I think we can give ANZ New Zealand a great big ‘F for Fantastic‘ on each of those seven principles…

Cover me!

For many of us, “Cover me!!” means we’re about to do something that may not turn out well…not so much a military “Hold My Beer!” as this needs doing and I’m going to need to some help… Covering fire is a little more personal than the good old ‘Fire mission, Regiment’ and other such methods of registering one’s unhappiness with a given individual, object or grid square…

But there’s other ways of providing cover…

Be honest, you all had a snigger when you saw this one, like, der, man…

It would be nice to think that it would be possible to deter ANZ New Zealand with a massive show (or application – I was, after all, the Force Application lead for most of my four years in the Air Force) of force/might/power. Even it such force/might/power was available, poor old ANZ New Zealand is like a mega-dinosaur controlled by a myriad of different brains that don’t talk to each other that well, if at all…any effect registered by one is unlikely to affect the others…

With ANZ New Zealand, the only brain that counts is its ego, the bit that gets worried when it might look bad; the one whose worst nightmare is a world where all its bribes of super-low interest rates (coincidentally announced just after the release of the FMA/RBNZ report on banks’ conduct in New Zealand)  or the millions of look-good dollars that it invests into sports… Like the cool kids at school, looking bad is what ANZ New Zealand fears the most…it cancelled the auction of my home to prevent 1 News running the story on it…

The path to ANZ New Zealand’s main ego brain is indirect…for any direct approach to work the brain would have to care and the simple truth is that ANZ New Zealand doesn’t care what you say to it, because ‘the people’ are beneath it, beneath the executive team, beneath the board, beneath the CEO who ‘earns more in an hour’ than most Kiwis take home in a week…instead the path to ANZ New Zealand’s care factor is external and three-fold:

The Banking Ombudsman Nicola Sladden nicola.sladden@bankomb.org.nz and the Chair of the Banking Ombudsman Board Miriam Dean  miriam.dean@barrists.co.nz

The political realm, especially those elected representatives who have been supportive to date. They have been looking at the changes necessary to close off all the remaining loopholes relating to banks’ lending. 

The media who play a canny game of what to release when…

to be continued…(nothing worse that a looooong post….)

It’s actually not about covering me…it’s about covering each other…

A weekend away…

It probably wasn’t appropriate that I go away for a three day conference in Wellington, not when I should be at home doing everything in my power to fend of ANZ’s latest attack.

Have cancelled the auction – which it still hasn’t told me about or advised the reasons for – ANZ then opted for a quiet tender sale which I only heard of from the local agent. I think that ANZ was hoping that it could slip this up the radar where no one would notice til it was a done deal…so much for this…

No listing was posted on Friday and I did not check over the weekend but this was up this morning:

Strangely, noting ANZ’s previous insistence that there be a sign on the front gate, there is no sign this time round (not yet anyway)…another sign of ANZ’s intention to keep this latest dirty work as quiet as possible…

Just to be clear,although I fought to halt the auction that fight was against the whole forced sale process and the false premise that it was based on…I cooperated fully for the advertising open homes prior to the auction as it was obviously in everyone’s best interests for the auction – if it proceeded – to realise the best return possible…

The tender sale that ANZ has now opted for does not have the same potential as it is not marketed as broadly, lacks the option for viewing or open homes (no inquiries have been made by ANZ or Harcourts about this), and will not have the same potentially competitive environment of a good auction…It also hasn’t been listed oin Trademe this time, further reducing the coverage and likely return…

Our conference hours were quite civilised at there was an opportunity to wander around the capital. Obviously all this with ANZ was never far from my mind and I could not help note an ironic imagery between some of its facilities and pop culture…

Is that me? Standing before the Dark Tower? Challenging the giant…?

That’s how it has felt for so long as I kept all this inside. Not just out of Kiwi staunchness – yes, admittedly a factor – but also because it has been clear from the start that ANZ’s best option, once its poor conduct was exposed, settling quietly was in everyone’s best interests…

Mike King was the keynote speaker on Saturday – anyone who has not been to one of Mike’s Key to Life addresses should go or at least make sure that their children do…

Mike’s themes is that one of the biggest obstacles to opening up and sharing our problems is that we don;’t want to admit to vulnerability or failure coz Kiwis don’t do either…

Not wanting to admit ir share that I wasn’t top of the world was the other reason that I kept this close for so long…that’s dumb because once I put it out there, I have been overwhelmed by the support and advice and just-being-thereness from all the communities I am a part of…

None of us are every truly this guy…

Life, in the curious state of limbo…

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This was the view as I came down the driveway on Thursday night…pretty much the same thing I see every night when I get home…maybe a few more puriri on the concrete and the grass…tis the season…

3 nov 17 a little dog waits

…and, like most nights, a little dog waits…

I had expected that the previous night would be the last time that this view would be truly mine, that by Thursday evening I would be someone else’s tenant after ANZ sold my home at auction on Thursday morning…

But just after 10AM…

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…less than an hour before the auction was due to commence…

Our assumption is that ANZ New Zealand found 1 News’ attentions rather unwanted and inconvenient and pulled the pin to neuter the story planned to air on Thursday evening. We can only assume that because ANZ has still not contacted me to tell me why the auction was cancelled – or even to tell me that it has been cancelled – or indicate where the journey may take us next; or even propose a way ahead…

Well, it’s not entirely true to say that I haven’t heard from ANZ: they did send me a new bank card yesterday…

…but its silence of this more dramatic turn of events is a major concern. Not so much that it has failed (again) to keep me informed but as a sign that ANZ New Zealand simply does not get it. It doesn’t get the most basic functions of customer service or even the most fundamental survival skill of not digging its hole any deeper…

Perhaps, I am so scary that the members of its board and or executive team are still drawing straws to see who gets to contact me. If so, team you need to harden up and start living some of the leadership stuff you are always talking about. Leadership is not about mega-profits or meeting targets; leadership is about taking it on the chin when one of your crew (or a few of them in this case) screws up…leadership is about doing the right thing…

So, ANZ New Zealand, here’s the expectation, just for future reference…I would expect that if you are going to put someone through the forced sale of their home, and then cancel that sale at the last minute – for any reason – you will front for that decision and tell me personally. You have my email address, my home address (that’s the place you were selling from under me, you get that right?), and my phone number…

I would certainly expect that some THREE working days later, you would have summoned up the moral fortitude to explain yourselves and why you have decided to commit me again to this limbo of the unknown…

By now I had expected to be well engaged in plan after this, knowing what, if anything, I walk away with after the auction, developing options, hopefully sussing out a small piece of land on which to start again, or, worst case, making plans to depart the Mountain community…

What’s your plan now, ANZ New Zealand? Will you wait till all the furore over the FMA/RBNZ report dies away and the media is distracted elsewhere to have another go at an auction…? Will you play divide and conquer with me and my ex-partner to still try to regain the money that YOU so recklessly loaned without proper security or process…?

Before you stick your hand back in the fire, please…remember that the matters you found so uncomfortable when when the media asked you about them are not so much those of the initial lending but your conduct over the last five years where you applied deception and misdirect to obstruct any opportunity for a fair resolution to the issues at hand…

In parting, I can leave you no more damning an indictment than that written by Patrick McInerney on Thursday morning…

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Not only are Pat’s words great in their own right, in distilling a complex issue down to a few short paragraphs, there are also a humbling reminder of the communities of which I am a part, even those where actual contact lies deep in the past…

I have been quite blown away by the response to my plight…I have been stopped in the street by people with inquiries or best wishes, called and messaged by comrades who I have not seen in over a decade…this all has been a reminder that we are never truly alone and nor should we feel that way…

Signing off today from Limbo…

#ANZdotherightthing

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Into the unknown….

All the way in

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Crunch day….in less then three hours, ANZ New Zealand will be auctioning off our home…

The TV1 News team is onto this story now and we did an interview at home yesterday. I wasn’t sure how to talk about this on air – far more used to being a fixer than a fixee – but the reporter was really able to draw it all out. It should screen tonight, not sure how long the item will be or the specific angle that it will take, but I do know that the TV1 background inquiries have got some interesting responses from ANZ…

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If ANZ really does want this whole thing to go away, it knows what it needs to do. Selling my home will not silence me – ask anyone!! – and will only make me more determined to expose ANZ New Zealand’s scungy record and hit them where they will hurt the most, in the $$$$$ bottom line…

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The FMA/RBNZ report released on Monday is only the tip of the iceberg. Banks like ANZ have been exploiting ordinary Kiwis unchecked for decades. Ordinary Kiwis deserve an opportunity to present submissions to a full inquiry, better still, a Royal Commission to the full depths of banking conduct in New Zealand can be exposed.

New Zealand needs a proper and empowered banking watchdog that is accountable to the Government and the people. The Office of the Banking Ombudsman, despite passionate and caring staff, needs better, more consistent processes to make sure that it can and is holding banks accountable for their obligations under New Zealand law and the Code of Banking Practice. If banks like ANZ are not acting fairly and reasonably towards all their customers, in a consistent and ethical way, the Banking Ombudsman should be all over them.

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All over them….with steel-shod boots…zero tolerance…big penalties…

The decision maker

Values…customer focus…accountability…

Antonia is ANZ’s Managing Director for Retail and Business Banking and a member of ANZ’s senior executive team. She responded to me when I raised my concerns with ANZ’s board a week or so ago…

If you watch this or nay of the other videos of her online, she speaks well and is clearly a smart person who will probably be leading many of the changes looming for New Zealand’s banking industry…

It seems that she is the one who makes the decision…

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Since Antonia’s response, things have gotten a bit wobbly for ANZ and the other big banks in New Zealand. They are being slammed for posting grossly large annual profits, none larger than ANZ’s; and  yesterday’s release of the joint FMA/RBNZ report into banking conduct in New Zealand has surprised few and angered many.

Hi Antonia

Thanks for such a swift response…

My apologies for taking so long to respond…this ‘went noisy’ once the first auction sign went up on my front fence (I was always clear that this would be the catalyst for me to bring this out into the open). In the last week or so, I have been humbled and embarrassed by the amount or moral and practical support from my family and local and professional communities…it has really stretched me just keeping up with emails, messages and phone calls of moral and practical support.

There’s no uncertainty about what may happen to my home. It is being forcibly auctioned by ANZ. In Taumarunui. On Thursday. At 11AM.

But it’s not too late…

Yesterday we saw the FMA and RBNZ release their findings from their joint inquiry into banking conduct in New Zealand. I doubt that there were many surprises there for either of us. It is quite clear that, while perhaps not on the same scale of the findings of the Australian Banking Commission, bank’s management of conduct risk in New Zealand could have been much better and ANZ is up there among those that ‘don’t get it’. I’ve tried to discuss conduct risk with some of your senior staff as part of trying to resolve our current issues, and they just didn’t get the concept…at all…

Even putting aside (for a moment) the original lending that started all this, ANZ’s conduct in my case since this all started in November 2013 (the 11th, so five years ago today week) has not been flash. It certainly has not been what we should expect from a  major banking institution, although the sad truth is that it has probably been exactly what we have come to expect from the major banks.

ANZ officers have said that the Credit Contracts and Consumer Finance Act prevented them disclosing information on the company to me. As I am sure you – and they – knew, this Act, by definition, only covers personal lending. It does not even mention company lending, let alone discuss any rules for or against disclosure by banks to guarantors of company lending. Surely we should be able to credit bank officers in management positions with adequate knowledge of the legislation that does or does not apply to different lending environments? Once might be a honest mistake but when the same ‘mistake’ happens at different levels in different locations in the same bank…well… “Mr Bond, they have a saying: Once is happenstance. Twice is coincidence. The third time it’s enemy action.”

Even today, your staff insist that they had no authority to disclose any information on the company to me. I had no access to the company’s documentation for two and a half years, until mid-2106.  When I gain that access I found that the loan documents contained a clause specifically authorising ANZ to release information on the company’s financial position to guarantors. Does ANZ really want us to believe that its staff aren’t aware of the contents of its own loan documents? Really…? Once again, Mr Bond…

Was ANZ also unaware of the Privacy Commissioner’s determination in 2012 that a guarantor’s interests and rights in jointly owned property used as security bring that information within the scope of ‘personal information’. This means that this information should be releasable under the Privacy Act. ANZ staff – your staff – should have known this.

The Code of Banking Conduct is clear that member banks, like ANZ, have an obligation to disclose information about lending to any party providing security for that lending. The guarantee and loan documents are equally clear that, for ANZ, guarantees are types of security. Instead of accepting and honouring this, ANZ invented a definition of the term ‘security provider’ that it attributed to the Code to support its position that the Code’s disclosure obligations for guarantees and security are different. The truth is that the term ‘security provider’ does not appear in the 2002, 2007 or 2012 versions of the Code, not does this term appear anywhere in the text of these documents. What is that about? Did ANZ not think that someone would eventually call it on this quite blatant fabrication? Or would ANZ have us believe that this was just a(nother) mistake, a miscommunication? In a formal letter..? A pop culture beer billboard springs to mind…

At the end of September, I met with ANZ in Wellington at its invitation. The stated purpose of this meeting was for ANZ to discuss the reasons for the mortgagee sale and to address any questions I may have. I was excited to finally have an opportunity to discuss these issues with ANZ. Frustratingly, ANZ was unwilling to discuss any of the reasons for the mortgagee sales beyond repeatedly assuring me that ANZ was comfortable that it had done it could and was comfortable with its position. If that is the case then I would respectfully suggest that there is something seriously wrong with ANZ’s moral compass. I travelled four hours each way, anticipating a frank and open discussion and instead only found staff who were unprepared and unable to discuss the reasons for the forced sale of my home.

And this is what is so frustrating…that ANZ remains unable or unwillingly to justify its position. If ANZ has a serious contrary argument – beyond “we don’t agree” – then I want to hear it. I don’t want ANZ or anyone else to agree with me unless I’m right – and that’s also the question that I have asked friends, professional colleagues, lawyers etc and no one can show me that reverse smoking gun that undermines the position that I have put to ANZ for five years, come next Friday.

If ANZ had been as willing to resolve this in 2013 as it became in 2016; if it had reduced my liability under the guarantee in 2013 as it did in 2016, both our positions would be considerably more favourable. Instead, ANZ embarked on this bizarre course of obstruction (to put it politely) in the apparent belief that it wouldn’t or couldn’t get caught out.  It could have done the right thing then and now I would probably be defending it, as a bank that did the right thing,  over the contents of the FMA/RBNZ report.

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The predicament that ANZ finds itself in now in one solely of its own making. I sympathise…to a point. I think it’s entirely likely that this situation was caused by staff from a bank (NBNZ) that no longer exists now, for whom management oversight was not as good as two banking systems merged. Certainly, I’ve found my personal banking services since NBNZ was finally subsumed totally by ANZ have been a lot better – not perfect, still enough there for me to support the FMA /RBNZ findings, but better – than there were previously. But the fact remains that staff, who ultimately belonged to ANZ, behaved recklessly in their lending processes, and avoided the obligations placed on banks in the Code….

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The obligation to act fairly and reasonably, in a consistent and ethical way.

The obligation to only provide credit or increase credit limits when the information available leads the bank to believe the debtor will be able to meet the terms of the credit facility.

The obligation to inform any party providing security, of the debtor’s obligations when a credit facility is approved.

I know that banks like ANZ are people…people who go home every night to loved ones and normal lives, people who are professional and proud to work for ANZ. From what I have seen of you in the last week, that probably you. It’s unfortunate that this situation was created over a decade ago by people who possibly don’t even work for a bank now; and that even those responsible for the actions above are only the smallest minority of ANZ’s overall staff. Harry Truman said “The buck stops here” and that’s a philosophy that resounds across the communities that I am honoured to be a member of, the community that has rallied around me at a time of difficulty. Leadership and responsibility flow from the top; regardless of where the fault may have occurred, leaders take it on the chin.

And that’s pretty well where we are now. In the last week we have seen the chair of the ANZ board and the CEO of ANZ Group both speak out for a better banking culture. We have seen ANZ post an annual profit disproportionate to its market share, a profit of almost $5.5 million a day (for context, I average around $100/day, maybe a little more if I pick up some guiding work in summer). We have seen the FMA and RBNZ release a joint report that finds significant weaknesses in the governance and management of conduct risks in the major banks in New Zealand and conclude that the overall standard of banks’ approaches to identifying, managing and dealing with conduct risk needs to improve markedly.

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Home

These events are not just catalysts for improving the conduct of our banks into the future; they are also a call to repair, as best they can, the damage that has been done in the past and the decisions to start that process can only come from the top, from you and your colleagues on ANZ’s executive team and board. And it’s not hard – it may feel hard but it’s not really: the anticipation is always worse than taking the plunge – you can do the right thing in not much time than it would take you to offer any comment on me or the horse I rode in on…in April 2016, ANZ said that it accepted my position. My position had been clearly stated and ANZ did not feel a need to qualify its acceptance in any way. All you need to do is just honour that statement…it might even look something like this:

Hey, team, I’ve reviewed  this again and were not gaining anything by pushing this. We said we accepted Simon’s position two years ago and we didn’t conduct ourselves that well leading up to that point. All this springs from the time that ANZ was absorbing the National Bank and it’s likely that there were some cultural conflicts in the at process. Let’s just get it sorted and not inflict any more of this on Simon, his family and ourselves. We’ve got enough on our plate now with the FMA/NBNZ report and this is now just a distraction…

Up to you…it is the right thing to do…

The email version didn’t of course have any pix…but who wants to look at a wall of text where avoidable…?

Just to keep the record complete, here’s the original email I sent to Antonia via LinkedIn:

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An Open Letter to Sir John Key

Dear Sir John

I am writing to you in your capacity as the Chair of the board of directors of ANZ New Zealand.

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On 8 November, ANZ will be forcibly auctioning my home. It is doing this to recover debt that accrued after ANZ, through its then subsidiary the National Bank of New Zealand, to my ex-partner’s company. Through Antonia Watson [Managing Director Retail and Business Banking for ANZ New Zealand] I understand that my case has been discussed within the board, so you are probably aware of it.

Update 22 November. ANZ cancelled the auction at the last minute, probably because it was uncomfortable about the media questions. Instead, it is trying to sell my home through a forced sale by tender that closes on 30 November. This method is unlikely to realise the same return as an auction, as ANZ tries to avoid the media spotlight.

For the last five years, I have been challenging this lending with ANZ on the grounds that it should have disclosed or even sought my approval for any extension of credit against my guarantee. ANZ’s position is that it had no obligation to disclose this.

There is no direct legislative compulsion for disclosure on ANZ for company lending as there is for personal lending under the Credit Contracts and Consumer Finance Act 2003. That notwithstanding, ANZ’s position is weak at best:

  • The Code of Banking Practice places an obligation on ANZ to act fairly and reasonably towards its customers, in a consistent and ethical way. ANZ’s conduct in extending these loans to my ex-partner without disclosing them to the guarantor was neither fair, reasonable or ethical. ANZ’s conduct since I first raised my concerns with it in the way it has withheld information, misrepresented the law and fabricated information has also been neither fair, reasonable or ethical. ANZ has been consistent however that’s not always a good thing.
  • The Code also places an obligation on ANZ to only provide credit or increase a credit limit when the information available leads it to believe the customer will be able to meet the terms of the credit facility. It is difficult to accept that a company with inconsistent income and a director earning less than $50k p.a. could meet the terms of lending on loans totalling over $400k.
  • Most importantly, the Code places specific obligations on ANZ to inform any party providing security, of the customer’s obligations when a credit facility is approved. ANZ has stated that the Code’s requirements in this area apply to guarantees and security differently. While that may apply for some banks, ANZ’s own documentation, including the original guarantee and loan documents, lists guarantees as forms of security.
  • Various bank officers have said that ANZ does have an obligation to disclose lending to guarantors.
  • In 2016, ANZ accepted my position without qualification or modification. It reduced my liability under the guarantee to the value of the one loan that it not only disclosed to me and but for which it required my approval. ANZ staff have said that this was a result of my persistence arguing my case. This reduction (approx. 75-80% of the debt at the time) is not the action of a bank that is in the right.

If I was an independent guarantor, this reduction might be attractive however as the company remains joint property, I am still liable for 50% of its total debt. I have argued that the total debt should be reduced to this amount and that this reduction should take effect from the time that I first raised my concerns.

I do not hold my ex-partner responsible for this additional lending against her company. During the period of this lending, she was not well and recovering from what we know now was a serious head injury. By concealing these loans from me, ANZ denied me any opportunity to make informed decisions about continuing the guarantee or to prevent of mitigate her lending.

ANZ’s position is further weakened by its conduct since I first raised my concerns

  • I requested that ANZ keep me informed of the company’s financial position. ANZ said that it had no authority to disclose this information. When I finally obtained copies of the loan documentation in 2016, there was a specific clause authorising disclosure of this information to guarantors. ANZ had no grounds to withhold this information from me.
  • Further to that request, in 2012, the Privacy Commissioner determined that information relating to jointly-owned property used as security under a guarantee should be considered personal information for the guarantor and be releasable to the guarantor when requested. It is not credible that ANZ would not be aware of this determination.
  • ANZ has cited the Credit Contracts and Consumer Finance Act 2003 as preventing disclosure of this information to me. That is not true. By definition, this act does not apply to company lending. It is not reasonable that ANZ would not know what legislation applied to various lending circumstances.
  • To support ANZ’s position that the Code of Banking Practice, a senior manager fabricated a definition of ‘security provider’ that he attributed to the Code’s glossary. In truth, this term does not appear in the glossary or the text of the 2002, 2007 or 2012 versions of the Code.
  • ANZ told us that the company’s default on its loans would affect our daughter’s home as well. As a result, her and her partner cancelled their wedding and took on considerable additional debt to renovate it to increase its equity, so they could get an independent mortgage. Once they had committed to this course of action, ANZ changed its mind and apologised saying that staff had look at an incorrect title.

ANZ’s conduct has added extra years to the resolution of this issue. It has also caused immeasurable stress on me and members of my family. In your position and the chair of the board, I am requesting that you encourage the board to:

  • Cancel the impending auction of my home on 8 November.
  • Recalculate any debt from November 2013 when I first raised my concerns with ANZ. The delays from this point are a result of ANZ’s conduct and we should not be penalised for them.
  • Honour ANZ’s acceptance of my position in 2016.

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In writing to you at this time, I note the massive profit just posted by ANZ New Zealand, recent comments by yourself and ANZ’s CEO, Shayne Elliott, on the conduct of banks in New Zealand. ANZ has also recently removed incentives for retail sales and I would offer that such incentives may also have been a factor in this reckless lending.

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ANZ has suggested I take responsibility for my actions – I am happy to – but in this case I would respectfully suggest that it is past time for ANZ New Zealand to take responsibility for ITS actions and do the right thing…

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#predatorfreeNZ #ANZdotherightthing #ANZNewZealand

PDF version: Letter to Sir John Key

Ice Cold in Alex

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Something else that I picked up from the Warewhare bargain bin, the 60th Anniversary issue…it’s been sitting in the wait list for weeks, til I was in the mood for something like this…

Ice Cold is one of the real British classics, understated and effective with elements of edge of the chair suspense and quiet humour against the backdrop of one of the less known theatres of World War 2. Although all the major Allied nations campaigned in North Africa, few know the details of the battles that raged up and down and back again along the North African coast from 1940 until 1943.

We may know some of the placenames…Tobruk, El Alamein…some of the personalities…Montgomery, Freyberg, Upham…but little of the detail…I’m likely that, as part of my guinea pig role at Waikato, I was able to study the New Zealand Division in WW2 under Laurie Barber and credit that one paper with opening my eyes to the ebbs and flows of this campaign.

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Ice Cold is the story of an Austin K.2 ambulance named Katie – the style brought to life for many in Airfix’s classic Emergency Set – retreating from Tobruk to Alexandria with a very small but very effective cast, only four key characters including Harry “You Can’t Kill a Squadron” Andrews, with a dozen or so minor supporting roles…through minefields, avoiding German land and air patrols, and negotiating steel sand drifts, hard rocky ground, and soft treacherous desert sands…

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The driving motivation through Katie’s odyssey is the vision of an ice cold beer in Alex(andria) and the end of the journey…

There’s plenty of opportunity for spoilers so I won’t go any further other than to say that this is a must-see classic…and the sort that I can watch time and again, each time picking up subtleties that I have missed before…

…possibly quite a timely one as I’m researching potential ‘ice colds’ for this summer…

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…seeking a vision that will motivate Tongariro Alpine Crossing hikers throughout this summer…

…possibly with onion rings…

 

View from the Top

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We all scoff at LinkedIn and question its true usefulness for anything, well, useful…yeah, we do…it’s like social media but just for the boring stuff…apart from keeping in touch with one or two people who don’t do the social media thing, LinkedIn is rather ‘yup’…

It has its uses though and, last week, I was able to use my one free month introductory special offer of LinkedIn Pro, specifically the InMail credits that come with the demo, to engage ANZ New Zealand board of directors….you can’t really reach much further than the very top…

From an academic perspective, I was interested to see if I even got a response, and if I did, how long it would take, noting the loooong time it takes ANZ staff to respond, especially if the subject matter is not to their liking. Recently the CEO of ANZ Australia – a Kiwi – said that  he “…answers every email he gets and responds to all written correspondence from customers usually on the same day…” So there’s a standard of sorts…

In all fairness, the board of ANZ New Zealand responded in less than two days. Disappointed in their response? Actually no and not surprised either…this is an organisation that has lost its way so badly that it can no longer see the moral forest for the trees. If the board had suddenly turned against ANZ’s position for the last five years on this issue, you would have to seriously question its competence as a major banking institution.

Today, Stuff posted a story “ANZ makes almost $2b from New Zealand banking” That, apparently, represents 40% of the total banking profit in New Zealand in that twelve month period. 40%! From a single bank! Are the others doing something wrong…or perhaps are they doing things right…? $1.99 billion dollars. Almost $5.5 million dollars EVERY day – by afternoon smoko on any given day, ANZ could clear RAL’s loss for 2018 – and not even blink. For that money, it could probably operate the Defence Force…

The culture of Gordon Gecko springs to mind…
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I think banks have, like a lot of companies, we did lose our way.

“We became unbalanced in terms of the pursuit of financial metrics and success which again are very seductive.

“It is like anything — people in any industry or any team want to win and if the score is about profit or return it becomes really easy to focus on that at all costs.

Shayne Elliot, CEO ANZ, 2018

My situation aside, it’s clearly time for change…let’s kick it off with our own Banking Royal Commission and go from there….

Please sign and share our petition of change in the New Zealand banking industry