ANZ and ASB class action won’t be covered by retrospective law change

Monday, 20 October 2025

MPs have agreed to back the Credit Contracts and Consumer Finance Amendment Bill, but didn’t agree to a proposal that could have reduced awards in a High Court class action against ANZ and ASB.

The class action against ANZ and ASB seeking compensation over lending law breaches will not be disturbed by retrospective law changes planned by the Government.

ACT, NZ First and National MPs on the Finance and Expenditure Select Committee have agreed to back the Credit Contracts and Consumer Finance Amendment Bill.

However, they did not agree to back Minister of Commerce and Consumer Affairs Scott Simpson’s proposal that could have reduced awards in a High Court class action against ANZ and ASB.

The bill was controversial when announced in April because part of it was likely to have reduced the potential costs faced by ANZ and ASB from a multi-million dollar compensation claim over loan disclosure mistakes they made between 2015 and 2019, though ASB has now settled its part of the class action for $135.6 million, subject to ratification in the High Court.

The class action was launched under laws introduced in 2015, which were designed to ensure borrowers were not misled over how much their loans would cost them, and the terms of their loan contracts.

The class action is seeking to have the High Court order banks to repay all the fees and interest they charged borrowers during the period in which they failed to meet their disclosure requirements. Simpson believed that penalty was unfair, and the bill would have changed the law to allow the courts to make an award depending on how much harm borrowers had suffered.

The finance minister said the drop in the OCR to 2.5% would flow through to lower interest rates for mortgage holders.

However, The Post reported that NZ First was uncomfortable with the proposal to interfere in a case before the court, while ACT supported it.

ANZ is defending the class action, which it believes it can win, but said it was disappointed the retrospective law change would not cover the class action.

“It’s surprising that MPs are saying it’s OK for a court case to go ahead under what was recognised as potentially bad law by Parliament in 2019, and confirmed again by the Select Committee,” said ANZ chief executive Antonia Watson.

Simpson said Government parties had accepted that retrospective law change was justified, and he was pleased that it covered other errors that may have occurred between 2015 and 2019.

“While retrospective law change is unusual, in this case I believe it is justified. The intent has always been to fix bad law and ensure the courts have the discretion to reach fair and equitable outcomes,” he said.

“Through the select committee process, it was suggested that ongoing court cases be exempt from these provisions. The committee considered this carefully and recommended that approach, and the Government parties agree.”

The select committee report, released on Monday, said 1543 submissions against the retrospective law change were received, and there were just 15 in support.

“Almost all of them particularly oppose the application of the amendment to active litigation and recommend that the case be allowed to continue to run unaffected,” the report said.

It is not the only retrospective bill before Parliament.

The other is the Marine and Coastal Area (Takutai Moana) (Customary Marine Title) Amendment Bill, which the Government says will provide “clarification” to the Marine and Coastal Area (Takutai Moana) Act 2011 brought in by a John Key-led National government to replace the 2004 Foreshore and Seabed Act introduced by Helen Clark’s Labour government.

That bill, if passed, would see four customary marine titles recognised by courts cancelled. They would have to be re-litigated under the new law, while three more claims currently going through the courts would have to be reargued under the re-written law.

Commerce Minister Scott Simpson has failed to persuade coalition partner NZ First that the ANZ and ASB class action should be included in the retrospective part of the bill.

Simpson said the focus on the retrospective elements of the bill had taken attention away from other parts of the bill, which were designed to make it easier for lenders like banks and finance companies to make loans.

“There has been significant attention on the retrospective element of the bill, which has at times overshadowed the broader purpose of these reforms,” Simpson said.

“Ultimately, this legislation is about improving access to credit and reducing unnecessary red tape for both lenders and consumers.”

The changes in the bill were designed to reduce compliance costs for lenders, and to remove personal liability for their directors should the companies they run breach lending laws.

“That provision was discouraging capable people from taking up governance roles and added to the regulatory burden faced by lenders,” Simpson said.