All parties in Parliament want a select committee inquiry into banking competition — except Labour, which believes it would be "premature".
It follows National's deputy leader and finance spokeswoman Nicola Willis calling for the inquiry earlier today, citing high bank profits but poor access to credit.
The Greens, ACT and Te Pāti Māori have confirmed they are supportive of the idea.
Willis wrote to members of the Finance and Expenditure Committee — of which she is part — today, asking it open a "short, sharp inquiry into any potential competition issues in New Zealand's retail banking sector".
"New Zealanders enduring a prolonged cost of living crisis will have been concerned to hear the Reserve Bank join a chorus of voices casting doubt on the competitiveness of the New Zealand retail banking market," she wrote.
Last week Reserve Bank chief economist Paul Conway said a Commerce Commission market study into the retail banking sector could be warranted.
"This comes at a time when bank profitability is high, even as access to credit has become harder to obtain for some borrowers and many mortgage holders are feeling crushed by rapidly rising interest rates."
She said bank customers deserved answers about the "adequacy of competition" in the retail banking sector, "why lifts in interest rate rises for deposits have lagged behind rate rises for lending and the impact of new regulations imposed by the Government".
Willis said she believed the terms of reference for the Select Committee inquiry should be narrow in scope and the hearing of evidence be limited to a narrow group of stakeholders also.
Those stakeholders should include retail banks, the Reserve Bank, Treasury and the Banking Ombudsman, among others, she said.
"After considering this evidence the Select Committee could then make recommendations to Government about any next steps that may be warranted, including whether it sees merit in progressing the Reserve Bank's suggestion of launching a market study.
"A formal Commerce Commission market study would take a long time and be extremely resource-intensive, creating a lucrative opportunity for lawyers and consultants, but highly unlikely to give New Zealanders any immediate answers to what are urgent questions.
"I hope FEC Members across political parties will join me to take on the task of getting New Zealanders timely answers to questions about retail banking competition. An open, publicly accountable Select Committee Inquiry would be a pragmatic step forward."
The Greens swiftly responded just 40 minutes later, saying it too supported an inquiry.
Greens revenue spokeswoman Chlöe Swarbrick — who is also on the Finance and Expenditure Committee — said big banks were "fleecing New Zealanders" and should be taxed to help pay for the cyclone clean up.
"The only thing standing in the way is political willpower.
"Four Australian banks made $180 a second in the past year while lower income New Zealanders spent ever more of their income on essentials," Swarbrick said.
"These banks make, on average, adjusted for income, 20% more from New Zealand customers than their Australian counterparts.
"There's a clear and immediate solution and that’s an excess profits tax. A 10% tax on those excess billions would raise more than half a billion and go a very long way to supporting flood and cyclone impacted New Zealanders.
"When the Reserve Bank and Monopoly Watch argue there's something far more sinister under the hood of these banks, politicians of course should take a deeper look. That's why we also support an inquiry, of whatever form we can get across the line, to look at far more fundamental problems."
ACT Party leader David Seymour said it would be "shameful" if the Labour-dominated committee blocked an inquiry that included investigation into the Government's regulation of the sector.
"Government regulation has a major influence on how banks operate. If Government taxes banks more, they will have to get the money from their customers. If Government regulates banks more, they will have to pass compliance costs on to their customers. If Government regulations reduce competition in banking, customers will pay more for a limited range of options. None of this is complicated, but Labour will do their best to make it so."
A Te Pāti Māori spokesperson confirmed to 1News it backed the inquiry.
However, Commerce Minister Duncan Webb said the Government was looking at options for a market study "where the greatest long-term gains can be made for consumers".
"A range of sectors are under consideration with no decisions yet made. Until the topic is determined it would be premature to initiate a select committee inquiry into banking."
New Zealand Banking Association chief executive Roger Beaumont said banks operated in a competitive market.
"The industry would welcome the opportunity to discuss bank profits and the contribution banks make to support the New Zealand economy, households and businesses.
“There’s also legislation in the pipeline to help people safely share their banking information with other service providers, which will support even more competition.
"The banking industry has been working with the government on this for some time to help ensure the best outcomes for consumers.”
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