"Most of the farmers I've had personally dealings with, their losses - and some of them have wound up losing their farms completely - have been around the $2 million to $4 million mark," she said.
Westpac's $2.5 million payout for the 38 eligible farmers was, on average, less than $100,000 each, she said.
"It certainly doesn't mitigate the whole loss to most farmers, not by a long stretch," she said.
Farmers now needed to decide whether to take the settlement.
"If they accept, they have to sign an agreement they will not engage in any further litigation or any other process...it's a bit of a hard call. For some of these farms, the settlements will be paltry. Some of them are of the view 'well something's better than nothing'. They're cash-strapped, the drought affected farmers and some of the dairy guys. You've got some farmers who are still banking with the banks...its still pretty hard for them and they're not able to refinance and so they're keeping their head down, so they're not going to kick up a fuss...you've got some farmers that are just plain angry and insulted and they're the ones who want to drive a class action," Walker said.
While pleased the Commerce Commission had taken up the investigation into the swaps, Walker believed the whole process needed a bit more transparency.
"I take on board the Commerce Commission opinion that litigation would have been a long stressful process and I accept that but nevertheless we need to have our financial institution and our lenders accountable for what they sell," she said.
The commission - which investigated Westpac's conduct around the swaps, believed it was misleading, and negotiated a settlement with the bank - said the payment was in the order of what it could have recovered if there had been a successful trial.
"In reaching the settlement farmers have certainty and will not need to go through a potentially lengthy court process. The length of time that has passed since the swaps were sold also meant there was no guarantee of court awards. Farmers will not have to go through the stress of proving their individual losses that occurred up to ten years ago to the court," commission chairman Mark Berry said this morning.
Read the Commerce Commission's statement here and the FMA's statement on the case here.
Between 2005 and 2009, a number of New Zealand banks marketed and negotiated the swaps, which are a financial derivative product that allows borrowers to manage the interest rate exposure on their borrowing.
The Commission, according to the settlement agreement with Westpac, considered that between 2005 and 2008, the bank gave impressions about aspects of the swaps that were - or was likely to be - misleading.
Although Westpac conveyed the impression that margins on loans would not change for the term of the swap, they could and in some instances did increase, the commission said.
While also conveying the impression that there were no or only a nominal costs to terminal the swap, this could be significantly higher than anticipated so that it was uneconomic to do so, the regulator said.
Westpac does not accept this and said it provided comprehensive information to customers on the swaps.
However, Westpac admits between October 2005 and August 2008 it breached the Fair Trading Act.
It admits that some of its conduct was likely to mislead or deceive some customers because it represented their swap arrangements fixed the cost of borrowing, when in fact the margins on the loans underpinning the swaps could increase.
The bank does not admit that any customers suffered or was likely to suffer any loss from its actions.
Read more:
• ASB to pay $3.2m in interest swaps settlement
• ANZ admits misleading conduct, settles for $18.5m
Westpac has also reached a settlement today with the Financial Markets Authority, which did not investigate the bank but had had concerns about its potentially misleading conduct over the sale and marketing of interest rate swaps to some rural customers. The FMA's settlement agreement means Westpac will undergo a review of its sale, promotion and marketing of interest rate swaps and its Notice Saver PIE.
In a statement this morning, Westpac head of AgriBusi¬ness Mark Steed said the matter was "historical" and involved "a small number of customers".
"We have worked constructively with both regulators who acknowledge that the bank's break charges were the same for swaps as for fixed loans and it did not undertake a practise of increasing margins across the board," Steed said.
"Although those customers entered into swaps a number of years ago and had access to legal and other professional advice at the time, we are pleased to have reached this settlement and provide certainty to those affected," he said.
Read the Westpac / Commerce Commission settlement here:
See the full Westpac/FMA settlement here:
