Having a say on draft banking report
The Commerce Commission will hold a consultation conference on the banking competition draft report in Auckland on May 13.
Monday, April 29th 2024, 10:01AM 
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The hybrid conference, meaning people can attend in person or online, will be to consider comments on the draft report.
Major backlash to the report has already come from many mortgage advisers, upset at commission chairman John Small’s comments that mortgage brokers are at risk of being “unduly influenced” by commissions they get from banks for placing mortgages.
Small has already met with the newly established Finance & Mortgage Advisers Association NZ, which aired its views on the industry and its place as a responsible financial platform.
The commission says the conference will help test its preliminary findings and draft recommendations with industry participants and interested parties, including members of the public, and to clarify and test submissions received on the report.
Day three of the conference is likely to interest mortgage advisers as it will include an advice session.
At this stage the commission envisages a conference agenda as follows:
- Day 1, Monday 13 May, on problem definition and regulatory factors affecting competition, including ESAS access, DCS funding and the CCCFA refinancing exemption. This will likely be of particular interest to banks and non-bank deposit takers and others.
- Day 2, Tuesday 14 May, on open banking and innovation, barriers including AML, and enablers of innovation. It will likely appeal to fintechs, banks and others.
- Day 3, Wednesday 14 May, on empowering consumers and likely to include a Māori stakeholder engagement session, a mortgage advisers and advice session, and a consumer issues and experiences session. It will likely be of particular interest to Māori stakeholders, mortgage advice sector and consumer groups and advocates.
The conference will be held at the Pullman Hotel in Auckland’s CBD.
The commission is reviewing parties’ submissions and will publish a more complete agenda beforehand.
There will be a limited number of times around the public conference sessions available to parties who wish to meet privately. The commission expects most topics will be discussed and explored in public, but recognises the possibility that some parties may, for legitimate reasons, prefer to discuss certain matters in a confidential setting.
It will invite post-conference final submissions and cross-submissions by Thursday, 30 May, which will be used with the conference submissions for the final report to be published on 20 Aug.
It will then be up to the government to decide how it will respond to the report’s findings and recommendations.
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On the 30th of July 2014, the Commerce Commission sent a letter to the Property Institute of New Zealand which had at the time challenged the panel valuation ordering system’s (VOS) introduction. Valuers had objected to the VOS being anti-competitive and monopolistic. The Commission received assurances from the various banks that they would still allow customers to source registered valuations from valuers on their historic panel of approved trusted valuers. ASB was the only bank to say to the Commission that they were making the VOS mandatory for customers. On the basis of these assurances given and the Commission’s own expectation that customers would continue to source valuations from valuers directly the Commission ruled that the VOS was not prohibitive to competition in supplying valuation services for consumers.
Fast forward to the 13th of May 2020 during the start of the covid pandemic and Westpac & ANZ both advised mortgage advisers that same afternoon that going forward (ANZ from the 1st June 2020) they would no longer accept customer or adviser-initiated RVRs that had been ordered outside of the Valocity or CoreLogic platforms. Westpac mandated that RVRs could only be ordered now using the Corelogic platform. This announcement by Westpac & ANZ was duly followed by the other lenders remembering that ASB had already made the VOS mandatory for its customers years earlier. The banks earlier assurances they had given to the Commerce Commission regarding the ordering of valuations simply evaporated.
As of the 29th April 2024 the Commerce Commission has still done nothing to address that the banks are now all ignoring it’s earlier ruling made around the introduction of the panel valuation ordering system. Consumers are now subsequently unable to choose the registered valuer that they engage for a valuation when it’s required for finance, and they are clearly paying more for valuations. This extends to consumers now been forced to pay an “urgent fee” if they want a valuation done quickly. Before the panel valuation ordering system was introduced consumers never paid valuers more money to have a valuation done quickly. A valuer would either have the capacity to do a valuation when it was needed or recommend that the customer approach another valuer instead. Valocity & CoreLogic though are essentially forcing consumers now to pay more because it’s good for their businesses financially and because they hold a complete stranglehold over how consumers now order a valuation when it’s required by a bank/lender for finance. This is anti-competitive and monopolistic, and it is not permitted under NZ consumer law.
A copy of the above letter sent to the Property Institute of New Zealand dated 30th of July 2014 is in the process of being brought to the attention of the Hon Andrew Bayly Minister of Commerce and Consumer Affairs & Minister of Regulation Hon David Seymour. If the Commerce Commission can’t do its job of been the primary advocate for consumer rights in New Zealand, then this will be bought to the attention of new Government.
If the banks can be allowed to disregard an earlier ruling made by the Commerce Commission what is the point now of the Commission chairing this consultation conference about competition within the banking industry? At best, the Commerce Commission appears to be ineffectual in its stated role of been the advocate for the New Zealand Consumer. At worst it appears to be wholly incompetent and very poorly led from the top.