Submissions

To: Finance and Expenditure Select Committee
Date: September 2024

Purpose

The submission’s core purpose is to highlight the systemic barriers faced by disabled individuals in accessing banking services and to advocate for comprehensive reforms that ensure equitable access, choice, and control for disabled people within the New Zealand banking sector.

Summary of DPA submission

The submission outlines the significant and multiple barriers disabled people encounter when interacting with banks, exacerbated by their disproportionately lower incomes and higher disability-related living costs. Despite previous guidelines aimed at assisting banks, issues persist in 2024, including a lack of banking information in accessible formats like Easy Read and New Zealand Sign Language (NZSL), and challenges with physical branch access and digital communication. Disabled customers often incur more charges for services due to inaccessible modern payment technologies or the need for staff assistance. The process of setting up or switching bank accounts is also problematic, especially for those with cognitive impairments or identification issues, partly due to requirements from legislation like the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT Act).
 
The DPA advocates for socially responsible lending practices, highlighting discriminatory barriers faced by disabled people in accessing loans or mortgages, often due to difficulties securing insurance. Furthermore, DPA stresses the importance of banks divesting from fossil fuels and adopting ecologically friendly practices, noting the increased exposure of disabled people to climate change impacts. It also notes that while Kiwibank has attempted to serve underserviced groups, overall competition in the banking sector does not adequately address the needs of all consumer groups. Lastly, the submission addresses specific challenges for disabled people in rural areas regarding access to cash and highlights the compounded barriers, including racism and bias, faced by Tangata Whaikaha Māori when accessing banking services.
 
Key Recommendations:

Recommendation 1:

That government introduce banking sector reform legislation, mandating guidelines for specific customer groups, including disabled and older customers.

Recommendation 2:

That banking sector reform legislation require banks to either substantially reduce or remove all fees and charges from both personal and business accounts by a set date.

Recommendation 3:

That all charges involved with bank switching are either significantly reduced or removed, and that switch-over processes and information about them are made more accessible for all customers, including disabled customers.

Recommendation 4:

That banking reform legislation require all banks and financial institutions to phase out investment in fossil fuels and shift towards ecologically friendly banking practices.

Recommendation 5:

That Kiwibank be retained in public ownership given that it has gone some way towards providing essential accessible banking services to under-served communities.
 
Supporting Statement 1:

Disabled people are disproportionately low-income earners, with the average weekly income for disabled people in 2023 reported to be $1,018 compared to $1,273 for non-disabled people, representing a differential of $255 per week, which means extra banking fees have a disproportionate impact on them.

Supporting Statement 2:

Despite the Bankers Association producing 'Guidelines to help banks meet the needs of older and disabled customers' in 2019, significant barriers persist in 2024, including a lack of accessible banking information (e.g., Easy Read), limited access to New Zealand Sign Language (NZSL), challenges with reduced physical branches and service hours, and reliance on phone or digital access that may not be available or accessible for many disabled people.