The decision of the Court of Appeal in the case of BNZ v Gloriavale is here if you want to read it. Gravedodger wrote his views on the topic here. I want to focus on a particular comment in the decision at paragraph [139]. That comment was this one:

[139] In particular, we do not accept the argument that it was arbitrary or capricious or irrational for BNZ to terminate the relationship for reasons beyond compliance with BNZ’s standard terms, or immediate financial risk. A bank may have a legitimate commercial and reputational interest in adopting, and acting on, policies in relation to matters such as social and environmental responsibility and human rights. So, for example, it would not be arbitrary or capricious or irrational for a bank to adopt an environmental responsibility policy, and to decide not to provide banking facilities for a major polluter pursuant to that policy, however regular the conduct of that entity’s accounts and however good that banking relationship may have been.

The topic of debanking is a wider one than just Gloriavale and fossil fuel companies as Nigel Farage discovered. If the banks can commence a process of destroying Nigel Farage simply for his political views, everyone needs to be concerned – you could be next.

The Gloriavale decision was issued by the Court of Appeal on 9 December 2024. Just two days following that, came this article from Interest.co.nz. Relevantly, it said:

Huggins (CEO of BNZ) said this was correct but it was because of the credit risk petrol stations could pose in the future, rather than being motivated by climate targets or policies.

“We’ve looked at our exposure to petrol stations and then we’ve looked at the long term future of those businesses, recognising that we expect conversion to electric vehicles to change demand for fuel services”. 

“Therefore, from a credit perspective, we’ve said, look, we have enough exposure in that space and don’t want to increase that exposure”.

However, Huggins couldn’t (or wouldn’t) say how big BNZ’s lending to petrol stations is currently, and admitted they weren’t just limiting exposure but phasing it out completely.

Smith said he had seen an internal document which said all debt should be amortised by 2030 or thereabouts, which also included a hyper-link to the Net Zero Banking Alliance (NZBA).

Huggins is not a serious CEO if he thinks electric cars will be phased in by 2030 (just five years away) in sufficient numbers to put his bank’s credit to fossil fuel companies at risk. Frankly, it’s laughable. I’d go as far to say that Huggins is full of s**t.

But the Court of Appeal has now given legitimacy to the BNZ’s policy through its obiter comment in the Gloriavale decision.

Pleasingly, unlike the other three main banks ANZ has not set an emissions reduction target and does not appear to be as staunch towards “dirty” fossil fuel companies in its debanking policies.

The wider issue nevertheless remains. Banking, for the present time at least, remains a critical service for everyone, including those that said banks might not agree with politically. One option for the likes of Nigel Farage (and others) is to “stash cash” in a vault and use cash everywhere, unless and until of course cash is removed from society: Hello Central Bank Digital Currencies (CBDCs).

Once CBDCs are introduced, New Zealand and other Western countries are essentially assimilating to China’s Social Score system.

Should I expect our government leaders to try to reverse this trend? Yes, and through legislation. Will they? No. All we will get from them is words:

The issue of debanking was raised in the Commerce Commission’s Final Competition Report on Personal Banking Services [5]. Last week, in response, the Minister of Finance, Hon. Nicola Willis, published a revised Financial Policy Remit [6] for the Reserve Bank of New Zealand, together with a new letter of expectations. In the latter, the Minister states that “[she] expect[s] the Reserve Bank to work with wider government to support the banking industry to take actionable steps toward making basic bank accounts more widely available, ensuring that every New Zealand has access to essential banking services without unnecessary impediments” [7]. These expectations do not, of course, go so far as to enshrine a right to a bank account.

IMHO, bank accounts are so fundamental they should be given rights status. This is not going to end well if this country and the western world continues down the “cancel culture” road in terms of banking facilities.