Bennett David: Non-bank Deposit Takers Bill — First Reading 
Bennett David: Non-bank Deposit Takers Bill — First Reading 
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DAVID BENNETT (National—Hamilton East) 
: 
 That was a very interesting speech from the previous Minister of Commerce Lianne Dalziel about the history and some of the more private I guess natures of Government in terms of what went on at that time in the history of the Labour Government which would have had some idea of the issue. But as the previous Minister said there may not have been a full comprehension of the effects or an understanding of how to deal with the situation at that time. So I thank that member for her contribution. 
A lot of New Zealanders did lose a lot of money and they were ordinary New Zealanders who had put a lot of their life-savings into those deposits. To hear the history of what the previous Government was looking at was very interesting I am sure for those individuals and families as they take stock of what has happened to their personal financial situations. 
The Non-bank Deposit Takers Bill is the last in a series of bills to deal with the very issue that both the Minister and the previous speaker mentioned. It aims to create an environment where we have to a certain extent more rules and regulations on the nature of non-bank deposits. It does also mean that all risk will be taken away from investors. As the previous speaker said the risk-return element will always be part of any investment decision. But the rules and regulations that we can use to tighten up that area of the finance market is something that is long overdue. 
When we look at this bill we see that it has a number of impacts in regard to the financial sector and especially towards non-bank deposit takers. First of all it completes that regulation process and it gives the Reserve Bank the power to remove directors and issue directions in certain circumstances. It can require non-bank deposit taker directors to notify the Reserve Bank if a director or senior officer triggers new prescribed suitability criteria. The Reserve Bank will have the power to remove those individuals which is quite an important power in the sense that there would be a notification there is suitability criteria and there is the power to deal with that situation should it be required. 
The Non-bank Deposit Takers Bill is expected to become effective in June 2013 which is 1 year after a transition period to enable non-bank deposit takers to meet the new licensing rules. There is certainly enough scope in there one would expect for those in the financial sector to meet the obligations and to be in a situation where they can adjust to the new regulations. 
The bill also introduces penalties for failing to comply with regulatory requirements. Offences will be graded according to their severity up to a maximum fine of $2 million for an entity and for an individual a fine up to $200000 and/or 18 months’ imprisonment. Those are quite substantial fines and penalties but this is a situation where we are dealing with individuals’ savings so in some cases where large sums of money are involved those fines and penalties may be seen as justifiably large. 
The actual detail in the bill is something I am sure we will go through further in this House as the bill will go through the select committee process and then through the Committee of the whole House. But I will go through some of the key things again. The ability to remove directors is a major part of the bill. The ability to issue directions to non-bank deposit takers associated persons and trustees is another very important part of it. Requiring the suitability of directors to be vetted by the Reserve Bank is also important. The Reserve Bank has the power to delicense non-bank deposit takers in certain circumstances and the bill requires the consent of the Reserve Bank to be obtained for changes in ownership of non-bank deposit takers in certain circumstances. 
So it is bill that will have a number of implications. It is there as a response to an issue that many New Zealanders have faced in recent years and we look forward to this House debating and passing this bill in a spirit that will enable all New Zealanders to have a little bit more security going forward.