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* This story has been changed to reflect that breaches are alleged but ASB has not admitted liability
ASB has reached a $135.6 million settlement to settle a class action lawsuit over alleged historical breaches of credit disclosure laws.
The amount is less than half of the $300m initially offered to ASB to settle in July.
Scott Russell, the lawyer representing the ASB plaintiffs, said the settlement was reached without ASB admitting liability, and was subject to High Court approval.
"This is a positive outcome for affected ASB customers," Russell said.
"After four years of litigation, settlement provides certainty, avoiding what would otherwise be a very long and expensive fight through the courts."
Russell confirmed the case against ANZ, which also alleged disclosure breaches, would continue, and ANZ was defending the claim.
"ANZ customers also deserve a positive outcome," he said.
"In March 2020, ANZ admitted to the Commerce Commission that between May 2015 and May 2016 it sent Loan Variation Letters to certain customers that contained incorrect information with respect to their loan."
The class action lawsuit alleged it was a breach of ANZ's disclosure obligations.
ANZ called the previous $300m settlement offer a stunt, while defending the claim.
Responding to its settlement, ASB chief executive Vittoria Shortt said it was a "pragmatic way to settle the matter".
"We continue to strongly support the CCCFA Amendment Bill currently before Parliament's Finance and Expenditure Select Committee, which will bring clarity to this confusing piece of legislation," Shortt said.
The proposed law change prompted concerns that the class action lawsuit would be undermined.
It included a retrospective fix that would mean instead of a blanket penalty applying for disclosure breaches between 2015 and 2019, a court would be allowed to decide what compensation was "just and equitable".
ANZ NZ said it would continue to defend its case.
"Our position hasn't changed," it said in a statement to RNZ, adding that ASB's decision to settle was a commercial decision for them.
"The potential consequences under the current law are disproportionate and not aligned with any actual harm caused."
ANZ said customers who underpaid their home loans by an average of just $2 per month could, under one interpretation of the law, be refunded the entire cost of borrowing up until today's date.
In addition, ANZ said it had already been subject of investigation and enforcement action by the Commerce Commission in relation to the issues that are subject to the class action, after it self-reported those issues.
"ANZ NZ agreed to pay more than $35 million to affected customers, leaving them all better off than they would have been if the issue hadn't occurred."
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