Harawira Hone: Financial Service Providers (Registration and Dispute Resolution) Bill — First Reading 
Harawira Hone: Financial Service Providers (Registration and Dispute Resolution) Bill — First Reading 
[Volume:644;Page:14009] 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Assistant Speaker. Tena tatou katoa e te iwi e noho tonu nei i roto i tenei Whare o tatou—special greetings to those of us left here tonight. 
It seems like just the other day—actually it might have been just last night—that I was speaking to the Reserve Bank of New Zealand Amendment Bill (No 3) the companion bill to this Financial Service Providers (Registration and Dispute Resolution) 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. Both this bill and the Reserve Bank bill introduce a new framework to ensure that all such deposit takers are licensed and to ensure that 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. That is all fine and dandy; this sort of policy change was actually needed some time ago to tidy up the sector and to make it more accountable to investors and consumers alike. The key problem 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. Although compliance costs will increase the changes are needed. 
Tighter control is needed over some of the rather 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. Talking about that lot it is worthwhile pointing out one of the flaws in this bill which is the proposed model of dispute resolution. Although dispute resolution provides a level of consumer protection it would have been better if the process were not so dominated by industry players as has been the case in the real estate industry which has led to the Real Estate Agents Bill providing for the dispute process to be administered by the Ministry of Justice. 
This bill before us 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. This is supposed to ensure certain standards for owners directors and senior managers. Although it is great to know that people will not now be allowed to serve in those roles if they have certain criminal convictions are bankrupt or are the subject of management bans history tells us that thieves and crooks come with a range of degrees and titles—particularly the good ones. 
The Maori Party is also very interested in the creation of this new registrar of financial service providers which will have the power to share information with the Securities Commission the Reserve Bank and the police. We will be even more interested to see how it actually rolls out in practice because the bill as it reads presupposes that the Securities Commission will be active and we know that it 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 low incomes from seeking development loans. I raise the possibility of establishing a Maori financial institution along the lines of the Grameen Bank successfully set up in Bangladesh. The Grameen Bank and its founder Mohammed Yunus were jointly awarded the Nobel Peace Prize in 2006 for placing trust in the skills and capabilities of the community by lending funds for community development. Best described as a microfinance organisation the Grameen Bank is a community development bank that makes small loans without collateral—no charges low interest and 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 assets scale to help them improve their lot through the funding of enterprise development. In the same way that other major financial institutions are backed by the Government we suggest that a Maori bank established along these lines should also be so underwritten in line with proactive recognition of the Treaty partnership. 
In sum we support the changes to ensure that deposit takers are better monitored and evaluated by the Reserve Bank so as to minimise the shock and ripple effects of financial collapse on families and the economy. 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 surely come. Tena koe Mr Deputy Speaker. Kia ora tatou e te Whare.