Federated Farmers welcomed the recent Commerce Commission's settlements with three major rural lenders, ANZ, ASB and Westpac.
The settlements come after a two-year Fair Trading Act investigation by the commission, which saw it consider hundreds of complaints from farmers who had suffered losses arising from alleged mis-selling of interest rate swaps.
Federated Farmers' position throughout the swaps saga has been that individual responsibility should be paramount, but with the caveat that if banks mis-sold swaps or were oppressive in their subsequent conduct, then the Commerce Commission should investigate and hold banks to account -- which it has done.
The three settlements are each different in that they reflect differences in the nature of marketing and conduct by each bank, such as increases in margins and use of early termination fees. While some farmers will feel the payments are insufficient, the commission feels they are a reasonable approximation of the potential losses it could have recovered through any court proceedings.
The settlements are a strong message to all banks of the need to get it right when selling what are complex financial products and that they need to be fair and reasonable when things go sour, as they did following the Global Financial Crisis.
