BNZ has payday lenders it “wants to stop” among its clients

BNZ must stop offering banking services to payday lenders if it is serious about committing to eradicate the sector, according to a banking expert.

When BNZ announced its $ 1.02 billion profit in early November, chief executive Angie Mentis said she was “absolutely determined” to disrupt the business of loan sharks and mobile traders.

“Our mission is to disrupt predatory lending and this year we celebrated five years of community finance lending. Our interest free, low interest loans are now available at 34 locations in New Zealand. “

BNZ has entered into a five-year partnership with Good Shepherd to provide community funding.

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It also now offers two mobile trucks The Good Shop in Manurewa and Porirua, at zero interest and low interest, in return for traders offering punitive credit contracts.

Mentis said predatory lending and truck shops was an area that “had to stop”.

But BNZ is also a banker for short-term, high-interest lending companies, such as Save My Bacon, which charges an annual interest rate of 547.5%, or 1.5% per day.

Claire Matthews, of Massey University, said it appeared the bank had an internal conflict in its views if it continued to provide banking services to payday lenders while campaigning to remove this sector from the market.

BNZ must stop offering banking services to payday lenders if it takes seriously its promise to eradicate the sector, according to a banking expert.

CHRIS MCKEEN / STUFF

BNZ must stop offering banking services to payday lenders if it takes seriously its promise to eradicate the sector, according to a banking expert.

“If the bank is really committed to eliminating this industry, I would expect it to end the banking relationship with payday lenders, otherwise I think there is a risk that it creates the impression that the bank is just greening its business.

“It would not be unprecedented as New Zealand banks have closed bank accounts for other financial service providers in the recent past.”

BNZ declined to say if he had a relationship with Save My Bacon, citing privacy concerns.

But community finance officer Frances Ronowicz said she had been clear on her mission to disrupt predatory lending.

“Over the past five years, we have liquidated a number of clients who we believe are engaged in predatory lending. On top of that, we also have an active program in place designed to screen out any new clients and review existing clients to ensure that we are not backing predatory loans. “

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