Well Bill (No Speakada) English (too good) has arisen as the slayer of the money dragons, according to his own assessment.
Old Bill (he’s about as bright as them) says he is introducing legislation to parliament to protect us from all those nasty finance companies who stole more than $8B from New Zealand investors through their sharp practices and downright lies.
Sounds like a real vote catcher doesn’t it? The trouble is; like so much of the legislation introduced to our parliament I fear it is doomed to be no more than a publicity stunt from a government desperately trying to ensure they are re-elected in four months time.
My cynicism is based not just upon my distrust of the people involved in particular and the system in general, however. Reading carefully what both JiangQi and No Speakada have said it hardly sounds like the big scary hunk of legislation it needs to be.
The first thing to note is that this Bill as opposed to the deputy PM hasn’t yet been tabled. So effectively he is referring to something that hasn’t even been written yet. Secondly I note the proposed name of the legislation would appear to be the Non-Bank Deposit Takers Bill, which implies it will not bind banks in any way. This is a worry as many of them were up to their Rolexes in the mire lately too. Why else did the government bail them out?
Another thing that bothers me about this upcoming legislation (if indeed it ever sees the light of day post election), is what we have been told about its proposed workings. No Speakada told the NZ Herald that, Under the new rules, NBDT directors will have to notify the Reserve Bank if a director or senior officer triggers new prescribed suitability criteria and the bank will have the power to remove those individuals.
Whoa now that sounds like it would work..........NOT. So we would have to rely upon directors of a Non-Bank Deposit Taker to TELL the Reserve Bank that one of their mates on their board has a dodgy past? Well that is going to happen isn’t it because they are all so very honest? In fact I don’t know why we are even proposing this legislation given that the finance company people are all such jolly good chaps.
And as if that isn’t enough; supposing one of these guys does rat on one of his mates, then the Reserve Bank will have the power to remove him. Those who read these things carefully will have already noted this is one of those conditional pieces of legislation that leaves the remedy or even enforcement entirely to the discretion of the appointed enforcer or regulator. Given this is the world of money it is not hard to imagine funds featuring as inducements to any number of people among all those involved to ‘look the other way’.
If these wallies were serious about this the law would PROHIBIT bankrupts and fraudsters from becoming involved in the finance business. Just as I wouldn’t expect a paedophile to be allowed to work in after-school care; I would have thought bankrupts and fraudsters should have no place in the finance world. Mind you it might mean a lot less people working in that particular industry, but that wouldn’t be a bad thing anyway.
No Speakada is also boasting about how they will raise the penalties for those who fail to comply with these new requirements. But even that is pathetic – ‘up to $200K for an individual and/or up to 18 months imprisonment’. You could get more for running a tinnie house!
I can’t see this idea being a fix to the problem of dodgy finance companies even if the National Disgrace Party does introduce it in the future.