Clendon David: Non-bank Deposit Takers Bill — First Reading 
Clendon David: Non-bank Deposit Takers Bill — First Reading 
[Volume:674;Page:20535] 
DAVID CLENDON (Green) 
: 
 Kia ora koutou. I am pleased to take a brief call primarily to advise the House that the Greens are very happy to support the Non-bank Deposit Takers Bill going through to the Finance and Expenditure Committee. Arguably the bill is overdue as was commented on by the previous speaker—but better late than never. It is fair to say that in the New Zealand economy the finance sector at one time was probably over-regulated. There was far too much regulation which was constraining and was something of a damp blanket on business enterprise and innovation. But clearly when deregulation came—when the change occurred—it came too quickly and for the wrong reasons and the pendulum swung far too far in the direction of deregulation. Many decent and honest New Zealanders paid the price quite recently with the collapse of finance companies. 
Clearly this bill sets out to put some oversight and some prudential regulation on the non-bank deposit takers and that has to be a good thing. It is also good that not only are we talking about regulating the institutions of course but also there will be some individual responsibility applied to this. For me personally some of the most galling commentary post the collapse of the finance companies was the proposition from lots of people that it was all some terrible accident; some terrible mistakes had been made and what a shame that was. In fact we know very well that a significant part of the collapse was due to good old-fashioned greed to people taking advantage and to sharp practice and outright dishonest fraudulent practice. It is good to see that the courts are slowly catching up with some of the folk responsible for it. Sadly some of them will no doubt escape legal process but nevertheless this new legislation will empower the Reserve Bank to accredit directors and if necessary to remove them to get people out of the sector who really ought not to be there. I am not for a moment suggesting that there are not a great number of people of considerable integrity in the sector but we need to aspire to that as a minimum standard and get rid of the cowboys essentially. We need to regain the confidence of people who have money to invest and to give people a safe haven for their funds and for their investments. People need to be able to put money into those organisations knowing that there is a level of risk that they understand clearly that everything is transparent and that they have a reasonable expectation that the reward will be appropriate to the risk they are taking. 
It is fair to say that the Greens’ only initial misgiving around this bill was the inevitable danger with legislation—that a sledgehammer would be used to crack a nut. There was some concern about the potential for compliance costs not being appropriate for the size and scale of some smaller institutions and organisations not least for the credit unions which have a very long and honourable history in terms of managing people’s money in this country. I think that concern has been recognised. It is shared by other parties so although it is something we will be keeping an eye on through the course of the select committee process we do not see any major concerns within it. We are particularly reassured that the Association of Credit Unions for example which is a key player in that sector of the market if you like is reasonably supportive of this bill. 
To reiterate we welcome this bill we would like to see it pass in a timely fashion and we will support it through the House. Kia ora.