Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Financial Service Providers Bill: Hone Harawira

Financial Service Providers (Registration and Dispute Resolution) Bill: Hone Harawira
Financial Service Providers (Registration and Dispute Resolution) Bill
Thursday 13 December 2007
Hone Harawira, Member of Parliament for Te Tai Tokerau

It seems like just the other day, actually just last night, that I was standing up in this House, speaking to the companion Bill to this Financial Service Providers (Registration and Dispute Resolution) Bill – the Reserve Bank of New Zealand Amendment Bill.

During that debate we talked about a new breed of financial institutions called “non-bank deposit takers” - building societies, credit unions, and finance companies, or loan sharks as some of them are known as, and both this Bill, and the Reserve Bank Bill, introduce a new framework to ensure all deposit takers are licensed by the Reserve Bank, and to ensure that all directors and senior managers are made subject to fit and proper standards.

The aim of the new framework of course, is to promote confidence and participation in financial markets by investors and institutions, and to ensure a sound and efficient non-bank financial sector, and that’s all fine and dandy - the sort of policy change that was actually really needed some time ago, to tidy up this sector, and make it more accountable to investors and consumers alike.

The key problem of course, has been the lack of adequate protections for investors, and given that more and more people are pulling their money out of finance companies, we need to prepare for more collapses, before they occur, and while compliance costs will increase, the changes are needed.

Tighter control is needed over some of these shaky, sharky and shonky financial service providers and advisers whom my constituents tell me have done a lot worse in terms of defrauding people, than even real estate agents.

And talking about real estate agents, its worthwhile pointing out one of the flaws in this Bill, which is the proposed model of dispute resolution, because while dispute resolution provides a level of consumer protection, it would’ve been better if the process was not so dominated by industry players, as it has been in the real estate industry, and which led to the Real Estate Agents Bill where the dispute process is now administered by Ministry of Justice.

This Bill also establishes a registration system for financial service providers to enable easy access to information about providers, and to allow more effective monitoring and evaluation of those providers as well.

The Bill is also supposed to ensure certain standards for owners, directors and senior managers of finance providers, and while it’s great to know that they will not now be allowed to serve in those roles if they have certain criminal convictions, are not bankrupt, and are not the subject of a management ban under companies, securities or consumer legislation, history tells us that thieves and crooks come with all range of degrees and titles, particularly the good ones.

We are also very interested in the creation of this newRegistrar of Financial Service Providers which will have the power to share information with the Securities Commission, the Reserve Bank and the Police, and we will be even more interested to see how this actually rolls out in practice, because as it reads in this Bill, it pre-supposes that the Securities Commission will be active – and we know that the Securities Commission has no great history of being proactive or diligent, in enforcing breaches of securities law.

Finally, it would be remiss of me to leave the House tonight, without noting the high finance company charges that often cripple consumers, and hinder those on lower incomes from seeking development loans; and to raise the possibility of establishing a Maori financial institution along similar lines to the Grameen Bank successfully set up in Bangladesh.

The Grameen Bank and its founder, Muhammad Yunus, were jointly awarded the Nobel Peace Prize in 2006, for placing trust in the skills and capability of its community, and in the lending of funds for community development.

Best described as a micro-finance organisation, the Grameen Bank is a community development bank, which makes small loans without collateral - no charges, low interest, but high levels of support and controls.

Such a bank for Maori would be well positioned to lend to those at the low end of the income and asset scale, to help them improve their position through the funding of enterprise development.

And in the same way that other major financial institutions are backed by the government, we also suggest that a Maori Bank established along these lines should also be so underwritten, in line with pro-active recognition of the Treaty partnership.

In sum, we support the changes to ensure deposit takers are better monitored and evaluated by the Reserve Bank, so as to minimise the shock and ripple effects of financial collapses, on families and the economy.

And we would also encourage wider discussion on the development of a financial institution to fund low level Maori development, as an idea whose time has definitely come.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines


Sector Opposes Bill: Local Government Bill Timeframe Extended

The Minister of Local Government Peseta Sam Lotu-Iiga has asked the Select Committee to extend the report back date for the Local Government Act 2002 Amendment Bill (No 2). More>>


Breed Laws Don’t Work: Vets On New National Dog Control Plan

It is pleasing therefore to see Louise Upston Associate Minister for Local Government calling for a comprehensive solution... However, relying on breed specific laws to manage dog aggression will not work. More>>


Not Waiting On Select Committee: Green Party Releases Medically-Assisted Dying Policy

“Adults with a terminal illness should have the right to choose a medically assisted death,” Green Party health spokesperson Kevin Hague said. “The Green Party does not support extending assisted dying to people who aren't terminally ill because we can’t be confident that this won't further marginalise the lives of people with disabilities." More>>


General Election Review: Changes To Electoral Act Introduced

More effective systems in polling places and earlier counting of advanced votes are on their way through proposed changes to our electoral laws, Justice Minister Amy Adams says. More>>

Gordon Campbell: On Our Posturing At The UN

In New York, Key basically took an old May 2 Washington Post article written by Barack Obama, recycled it back to the Americans, and still scored headlines here at home… We’ve had a double serving of this kind of comfort food. More>>


Treaty Settlements: Bills Delayed As NZ First Pulls Support

Ngāruahine, Te Atiawa and Taranaki are reeling today as they learnt that the third and final readings of each Iwi’s Historical Treaty Settlement Bills scheduled for this Friday, have been put in jeopardy by the actions of NZ First. More>>


Gordon Campbell: On The Damage De-Regulation Is Doing To Fisheries And Education, Plus Kate Tempest

Our faith in the benign workings of the market – and of the light-handed regulation that goes with it – has had a body count. Back in 1992, the free market friendly Health Safety and Employment Act gutted the labour inspectorate and turned forestry, mining and other workplace sites into death traps, long before the Pike River disaster. More>>

Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news