Rural lending rates should be more transparent, report says
Hooper explained that the report identified a considerable difference between rural and residential lending rates.
“This has been a real grey area for farmers, who have been asking fair questions about why they’re paying so much more interest than residential borrowers.”
The report recommended that big banks should appear before the committee regularly, which Hooper said was good news for ongoing accountability.
“Six-monthly appearances before the finance and expenditure committee should keep the big banks honest, with significantly increased accountability and political oversight.”
The Reserve Bank would also be required to review capital requirements for rural lending, with changes monitored and publicly reported.
The report confirmed capital rules cost farmers between $555m and $714m a year.
Climate lending recommendations don’t go far enough, farmers say
While some guidelines on how banks applied climate-related disclosures were recommended, Hooper said the committee could have been stronger on climate lending rules.
“Farmers are very frustrated about having to provide emissions data, and about inconsistent and confusing information requests,” he said.
“The report calls for clearer climate-related lending rules, standardising practices to balance environmental goals with practical lending.”
Federated Farmers’ six-monthly banking survey showed that providing emissions data to their bank was a real pain point for many farmers.
Hooper said banks should make decisions based on economic returns, not emissions targets.
Banks in small towns disappearing, rural connectivity still patchy
Rural Women New Zealand president Sandra Matthews was grateful to see farmers’ struggles with a lack of banking services in rural towns recognised.
“The committee has heard what we have been saying for years - branch closures and the loss of access to cash have a big impact on rural communities,” she said.
“The loss of these services makes life difficult for rural people and businesses, if they have to travel long distances to do simple bank tasks, such as cash withdrawals and deposits, bank their business takings or maintain a cash float.”
While banking services moved increasingly online, poor connectivity in rural areas meant many did not have it easy.
“Older people, those with limited digital skills and communities with patchy connectivity are being left behind,” Matthews said.
“For many rural families and businesses, which are dealing with the often complex and multi-faceted intersection between personal and business finances, the opportunity to engage with bank staff face to face is also really important.”
She said her organisation supported the Reserve Bank’s planned community cash service trials, due to begin this year, and agreed with the committee that access to cash must be safeguarded for rural communities.
- RNZ
