Commerce Commission ANZ settlement ‘fair and equitable

Federated Farmers call Commerce Commission ANZ settlement ‘fair and equitable’
Federated Farmers have described the Commerce Commission settlement with the ANZ Bank over interest rate swaps as ‘a fair and equitable outcome’ for rural customers.

Federated Farmers President Dr William Rolleston says the agreement that the ANZ will pay compensatory payments to customers, who believe they were misled by their interest rate swap contacts, is the best outcome which could be expected.

“While some farmers found interest rate swaps a useful instrument, others felt they were not adequately informed of the risks should the market run against them. The Global Financial Crisis created those unexpected and unfavourable conditions. Federated Farmers wrote to the Commerce Commission asking it to investigate and the outcome today vindicates our stance,” Dr Rolleston says.

“Some rural people signed on for interest rate swaps as long ago as 2005 and so for many customers it has been a long running issue that now can be brought to a conclusion.”

“The alternative was protracted litigation which is always an uncertain process. I’m pleased to see the Commerce Commission believes the distribution of the $19m fund, provided by the ANZ, will result in payments which are ‘a reasonable approximation of the potential losses’ experienced by up to 178 of the ANZ’s customers who laid complaints, while not creating a moral hazard situation for the future.”

Dr Rolleston says the saga is a reminder to all farmers that they must be sure they understand the contracts they are entering and that they get sound and independent advice.

“I encourage affected farmers and the ANZ to reach settlements without further delay and hope that other banks which had sold interest rate swap schemes will also quickly reach a fair and equitable agreement with the Commerce Commission for the farmers concerned.”

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