ANZ, NZBA take MBIE to task over the lack of plain language in the Responsible Lending Code

By Gareth Vaughan

The New Zealand Bankers' Association (NZBA) and ANZ have taken the Ministry of Business, Innovation & Employment (MBIE) to task over the complex nature of its 85 page draft Responsible Lending Code, including criticising MBIE's use of colons and semi-colons.

"As we have raised previously in discussions with you, the Code is not drafted in plain language despite the fact that the Code itself requires lenders to provide documentation drafted in plain language to assist customers," NZBA says in its submission.

"We think that this highlights the difficulty in drafting technical documents in plain language, but note that there are areas where plain language amendments could benefit the Code. We understand that some of our members have submitted individually with suggested drafting changes to this effect and we support those suggestions."

ANZ wraps up its 12 page submission with a section under the heading "plain language." The bank suggests a range of changes as below.

Sentences should be short - below 20 words is an ideal length for most readers. Longer sentences can be broken into separate sentences or lists.

Paragraphs should be short and focused on one topic - it's useful to keep paragraphs to between one and seven lines long to avoid overwhelming a reader.

Simple, everyday words should be used where possible. For example "indicate" can be replaced by "show." The Code uses "verification" and this could be replaced with a concept of checking that information is reliable.

Wordy phrases should be removed. For example, "take into consideration" can often be changed to "consider." And "can make a judgment as to the number and extent of inquiries that should be made" can be replaced with "can judge what inquiries to make."

Lists should use consistent punctuation. There are some lists in the Code which incorrectly have colons rather than semi-colons. Colons should introduce a list and semi-colons can be used to separate items in a list.

ANZ's submission, which carries the names of senior counsel Cushla Scholfield and general counsel and company secretary Craig Mulholland, goes on to offer to provide contact details for "industry experts" MBIE officials could talk to or recruit to help them understand how plain language techniques can be applied to the Code.

Bank customers who've spent hours scratching their heads struggling to get to grips with complex bank documents may see a case of the pot calling the kettle black.

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