9 April 2025

The Government's proposed amendment to the Credit Contracts and Consumer Finance Act (CCCFA) has been criticised as explicitly discriminatory legislation benefiting major Australian-owned banks at the expense of New Zealand consumers.

Banking Class Action lawyer, Scott Russell, says:

“This amendment represents unprecedented political interference with the judicial process, specifically targeting an ongoing class action which was filed four years ago against ANZ and ASB by effectively changing the rules mid-litigation."

"This proposed amendment is a direct attack on the rights of everyday New Zealanders," Russell continues. "It's highly unusual for the Government to seek a fundamental change to consumer protection laws that favours powerful Australian-owned banks while they're in the middle of legal proceedings."

The amendment undermines confidence in the rule of law and therefore, confidence in everyday commerce and international investment. It harms New Zealand’s reputation and unfairly denies the plaintiffs their claims, for no other reason other than to effectively transfer wealth to Australian owned banks

The class action, filed in 2021, follows admissions by the banks that they failed to comply with CCCFA disclosure requirements following a Commerce Commission investigation. Thousands of affected borrowers are currently entitled to refunds of interest and fees under existing law. The case has already secured class certification and is awaiting summary judgment.

“Consumer protection laws are critically important to discipline on the behaviour of large corporates, particularly where they have dominant market positions,” says Russell. “Passing retrospective legislation like this makes New Zealand look weak and shows the Government is prepared to bow to corporate interests rather than protecting ordinary New Zealanders.”

If passed, the amendment would retrospectively alter penalties for breaching the law, giving judges broad discretion to reduce or deny compensation that consumers are currently entitled to receive.

"The banks themselves have admitted this case poses no material risk to them, yet they've clearly lobbied successfully behind closed doors for legislation that could deny hundreds of thousands of Kiwis their rightful compensation," says Russell.

"Retrospective legislation is universally recognised as offensive to the rule of law except in extraordinary circumstances. This amendment violates legal certainty and creates a dangerous precedent for future governments to retroactively nullify consumers' rights without justification."

There are no other known active cases that would be affected by the proposed change. Russell says:

"This is clearly a targeted intervention to amend the law to benefit two powerful Australian-owned banks at the expense of thousands of everyday New Zealand consumers. It contravenes all established norms and upends the right to a level playing field when pursuing claims through the justice system.”

The amendment also contradicts earlier Government assurances. In September 2024, then-Minister Andrew Bayly stated that retrospective changes were not being considered. Bayly subsequently left Parliament on 21 February 2025, and the 5 March 2025 Regulatory Impact Statement issued under the new Minister confirmed that retrospective provisions had since been included — with no clear justification and no adequate consultation.

“The amendment undermines the constitutional principle that all are equal before the law and sets a dangerous precedent by allowing powerful corporate interests to circumvent legal accountability through legislative intervention.”

“This is about taking money out of the pockets of New Zealand families and putting it into the hands of Australian-owned banks, their executive bonus pools, and shareholders,” Russell states.

“Separating Parliament from our courts is fundamental to our democracy. This amendment crosses that line.”

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