Settlement payments completed in interest rate swaps case

7 October 2015
Release No. 34

Settlement payments completed in interest rate swaps case

The Commerce Commission has completed administering the payment funds established by the settlements in the interest rate swaps investigations, with over $22 million now paid to complainants and rural charities.

The Commerce Commission investigated ANZ, ASB and Westpac banks for their marketing, promotion and sale of interest rate swaps to rural customers between 2005 and 2012. As a result of settlements reached with the banks, nearly $20 million has been paid to eligible customers with an additional $2.5 million paid to 14 regional Rural Support Trusts and the Dairy Women’s Network.

Payment to the charities was agreed in each settlement to support the rural community as a whole on account of rural customers of ANZ, ASB and Westpac who were not complainants in the case. Altogether the 14 Rural Support Trusts received $2.3 million from the ANZ and Westpac settlements, and the Dairy Women’s Network received $250,000 from ASB’s settlement.

Of the cash settlement offers sent to complainants, over 97 per cent were accepted. A small proportion of customers who were not offered a cash payment, as their settlement was to be offset against recorded debt, declined the offer or did not respond. The overall acceptance rates are outlined for each bank in a table below.

Chair Dr Mark Berry said the Commission had negotiated strongly to secure payments from the banks for as many complainants as possible and was pleased with the high acceptance rate.

“Being able to deliver the payments now, compared with farmers otherwise facing lengthy and uncertain court proceedings, is a good outcome. We are happy to say the settlement process has been completed and we are pleased to see that charities that assist farmers in difficult circumstances are receiving a meaningful benefit from this case,” Dr Berry said.

The completion of payments concludes the Commission’s involvement in this case.

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