Was NZ First behind ASB settling class action for $135.6 million?

Wednesday, 8 October 2025

ANALYSIS: ASB blinked, but the question is why.

On Tuesday, ASB agreed to settle a class action lawsuit for $135.6 million despite the Government moving towards passing a law that would have made it unlikely that it would have had to pay out a sum anywhere near that large.

The bank’s chief executive, Vittoria Shortt, said the settlement over claims relating to disclosure law breaches between 2015 and 2019 was a pragmatic decision to end four years of legal proceedings and provided certainty to the bank.

The settlement means the bank would not face a civil trial at the High Court in March next year.

But some believe the real reason ASB settled was that it had lost confidence in the Government’s ability to pass a bill containing retrospective law changes that would have been likely to soften any award made by the court, and perhaps derail the class action entirely.

There’s talk that the Government coalition party reducing the chance of the retrospective parts of the bill passing into law is NZ First. And NZ First is not doing anything to lay that suggestion to rest.

Kent Duston from the Banking Reform Coalition, which has been campaigning for reform of the banking sector, said: “It seems likely that minister [Commerce and Consumer Affairs Minister Scott] Simpson’s desire to retrospectively change the law is not going to proceed.”

“It appears that their get out of jail free card may not exist,” Duston said.

The Credit Contracts and Consumer Finance Amendment Bill, which contains the proposed retrospective law change, was introduced earlier this year by Simpson.

It caused immediate controversy as it was seen by opposition parties as proof that the National Party had succumbed to bank lobbying.

Scott Russell, the lawyer taking the class action, protested against a move by the Government to intervene in an active lawsuit, potentially de-railing the ASB/ANZ class action entirely in which the banks faced the possibility of having to pay back all the fees and interest earned on loans on which it had failed in its legal disclosure duties.

Simpson acknowledged it was “unusual” for a bill to interfere with a case before the courts, but he described the current law as a “really bad law” with a punitive effect.

But in its first reading in Parliament in July, cracks in the coalition were showing over the plan.

National’s coalition partner ACT threw its full weight behind it, even the retrospective portion of it, but NZ First had reservations.

ACT’s Parmjeet Parmar said: “ There has been a lot of talk from those members about this bill being applied to any errors in documents between 2015 to 2019, and, yes, there is that retrospective element in here, but it is very important to note that it doesn't take away the responsibility of banks. What it does is it gives the flexibility, it gives the discretion to courts to see that the decision, if there is a mistake—if there is an honest mistake—that the decision is proportionate to that mistake.

“At the moment, what happens is the penalty is that the whole interest cost and fee is refunded. But if there is an honest mistake and the consumer is not worse off, then the courts will have the discretion to make a decision. That is what this bill does. Of course, we would also like to hear about the retrospective component of this bill in the select committee, see what stakeholders have to say.”

But, she said: “Overall, I would say that this bill is a good bill.”

ACT publicly confirmed it remained in support of the retrospective element of the bill.

NZ First’s support was much more qualified with Jamie Arbuckle saying: “New Zealand First will support this bill to the select committee stage, but we do have some caution around some aspects of it.”

That caution appeared to relate to the class action court case.

“We will be looking at that issue closely, around the court stuff that is already in process,” Arbuckle said.

“We will want to understand more through submissions and find a fair way through that. Yes, the bill is saying lenders won't be unfairly penalised for small or harmless mistakes, but we've got to find the right balance as well. It is important that creditors and borrowers are treated fairly, and we will be watching this legislation so that it strikes the right balance.”

NZ First’s relationship with the big four Australian banks has been testy. Earlier this year, nettled by what it saw as big bank moralising on climate change, and a failure to support farmers, the party introduced an anti-woke banking bill, though it appeared an act of political theatre that stood no realistic chance of becoming law even before a disastrous select committee hearing into the proposal.

Party leader Winston Peters has from time to time expressed frustrations with the big four Australian-owned banks, including in 2019, when he called for them to stop demanding such high dividends from their New Zealand operations.

At the first reading of the CCCFA Amendment Bill, Labour and the Greens were clear on their opposition.

Labour’s Duncan Webb called it bewildering.

“This is stripping the rights away from consumers,” he said.

But, he told Parliament he had hopes NZ First would sink the retrospective parts of the bill.

“I just want to say there's a ray of hope. I heard the New Zealand First Party, a party that does have some record of standing up for the little guy, and they said that they're supporting this to the select committee with reservations,” Webb said.

At 10.15am on Wednesday, the MPs on the Finance and Expenditure Select Committee met to discuss the bill in a meeting the public was excluded from.

NZ First was not keen to discuss its position publicly. Chief of Staff Darroch Ball told The Post: “ We will await the final committee report and read the key submissions as part of our normal consideration of all aspects of the legislation.”

NZ First’s MP on the select committee is David Wilson, who entered Parliament after serving as chief executive of Northland’s economic development agency. He was victim of fraud in 2022, and has spoken publicly about systemic failures, including in the banking industry, that were making it easier for crooks to steal money from members of the public through scams like fake investment scams.

Duston said after ASB agreed to settle the class action, there was now less reason for the Government to pass retrospective law.

ANZ continues to defend the class action, but Duston said the Government was now left attempting to pass retrospective legislation to protect just one interested party, the largest bank in New Zealand.

Simpson has also been approached for comment.