In my email, I asked again for the information on the company’s lending to be disclosed to me, as required by the Consumer Credit Control and Finance Act 2003 (CCCFA). You know, the legislation that ANZ cited to me as governing this kind of disclosure.
A couple of days later, this lovely lady (she was, really, very pleasant to chat with) called me to get an initial feel for the issue. I thought that was good but also quite clever – no word by word record of a phone conversation.
Her written response to me was interesting – and arrived only a few days after we spoke: not everyone in ANZ feels they need to drag the chain.
Relevance of the CCCFA
OK, that’s fine. That’s what the Act says. But it surely begs the question: why did ANZ say this if the CCCFA does not apply?
Access to company information
Actually, no I didn’t…I stated that ANZ had been negligent in disclosing changes to the company’s lending that did, or had potential to, affect my guarantee; and I asked for ANZ to confirm what my actual liability was.
ANZ does not actually state what legislation does cover disclosure of company lending to the guarantor of that lending. He says again and again that it can’t disclose this information to a relevant interested party like a guarantor but it cannot state what the actual legal obstacle to that disclosure is.
Just to add some context around ANZ’s approach to lending, specifically to disclosure and consultation.
I didn’t know very much about this stuff (that has all changed now!). My approach to money has been that you live within your means and occasionally might take out a loan to cover a big ticket item like a car. Of course, the biggest ticket item that many of us are likely to take a loan out for is, of course a home. But even then, you live within your means, you scrimp, you save and you make it work…but the key thing is living within your means…you don’t take out loans that you cannot repay…
In our personal/joint accounts, ANZ took this to the nth degree of pedantry i.e. it was super-pedantic about making sure it consulted with each of us and received our permission before allowing even a small $1-200 extension to our joint overdraft to cover perhaps a pay whoopsy or something like that. Even with two pays going in fortnightly and good payment history, ANZ would still insist on full consultation and our joint approval before enabling any extensions of credit…even small ones…even for only a couple of days…
To be honest, as annoying as it could be at times, I was comfortable with this rigour. I liked that ANZ took this care to ensure that we were both in the loop for any changes to our commitments – no surprises….
Well, they say you don’t know what you don’t know…as the next Act reveals…
A few months after my partner and I separated, ANZ contacted me.
This contact was from the manager of an ANZ branch. Being the manager of a bank is a position of some status and I think it is reasonable to assume that bank managers in New Zealand are competent. Certainly I do and I think the onus is on ANZ to prove otherwise.
This is ANZ, coming to me, off its own bat, to ask me about a change to the company’s lending. Please note:
“…I thought it would be prudent to contact you to disclose this information beforehand…”
“…Full guarantors disclosure would be sent to youonce it has been set up…”
Does that sound like an ANZ branch manager thinks that ANZ should disclose changes to a company’s lending to the guarantor of that lending?
I responded that I was cool with that holiday but asked for more details on the company’s financial position and to be consulted on any further changes. One of the reasons, beyond simple good practice, was because the stated $36.99/day interest rate seemed a little high for the loan of approx $90k that ANZ had asked me to approve 3-4 years before.
I did what most of us would do when referred to a section of legislation; I downloaded it and read it. Oh dear…that Act (CCCFA for short) doesn’t say that at all…
…in fact, it says exactly the opposite…
I responded, pointing this out and asking for the disclosure of the information required under the Act that ANZ had cited. That’s important: ANZ, a major international banking institution, introduced this legislation as governing the disclosure of information relating to company lending. Is it fair and reasonable of me to expect that it knows what it is talking about?
ANZ’s response? Nothing. Nada. Zip. Zilch. Radio silence.
If you guarantee or otherwise secure a loan for a person, you are protected under the CCCFA and, since 2015, the Responsible Lending Code. If you guarantee a thing, like a company, then you have no such protection. The guarantee is what they call ‘all obligations’ and ‘unlimited’: the gift that keeps on giving taking.
What that means is that ANZ can keep on lending against that guarantee. The really good bit is that ANZ feels that it doesn’t have to tell the guarantor about any of this until it wants its money back and it hits him with a demand for the full amount of the outstanding debt. Yes, really.