Stuff and Nonsense continue to write garbage unabated. Their latest idea is… wait for it… a bank specially for Maori.?quote.

Recent calls, by the M?ori Council, for a M?ori bank will probably attract some negative comment from traditional financial circles but such an idea needs to be given serious consideration and even government assistance to get it established if required. end quote.

So let us get the agenda established right away, shall we? The Maori Bank will require government assistance. In other words, taxpayers will be funding it. Great idea. quote.

The suggestion is a response to the number of M?ori being shunned by the four big Australian-owned banks for home loans and the M?ori Council has asked all iwi to work together to establish their own bank.

With M?ori home ownership at 43 per cent compared to 63 percent for the general population and with M?ori are five times more likely to be homeless than others the issue is a serious one. end quote.

Hang on a minute. Giving mortgages to Maori to encourage home ownership is one thing, but how exactly is a bank supposed to end homelessness? That is not usually found in a bank’s core services. quote.

M?ori Council Tamaki District chairperson Matthew Tukaki said getting a loan was one of the biggest hurdles for M?ori wanting to own their own homes, Getting credit lending through the traditional banking system or the big four banks was very restrictive. end quote.

Banks have very strict criteria, designed to prevent a large number of defaulting loans. If a borrower does not have the income to sustain a mortgage, then it would be madness for the bank to lend. Think Freddie Mac and Fannie Mae. They caused the GFC. That is how serious defaulting on loans can become. quote.

Mr Tukaki said such a bank would focus on lending for building on M?ori-owned land and small business loans to close the gaps of financial inequity many M?ori face. More importantly he said a M?ori bank would be for everybody but the primary focus would be on the development of M?ori. end quote.

In other words, a racist bank. That is not usually found in a bank’s mission statement either. “We promote the interests of Maori and everyone else can go jump,” is not what you find on the walls of the BNZ. Not yet, anyway.

Apparently, this is not a new idea. It has been done before… and it didn’t end well. quote.

Rather than the authorities assisting with advice on the complexities of banking however, the bank became the source of jokes and disparaging comment with accusations that the directors, who were paid an honorarium, were also helping themselves to the almost unlimited money in the bank.

The failure of the bank however was inevitable but when it came it was not due to a shortage of new deposits or a run on funds. It came from the tragic mix of ancient tribal protocols and the rules of capitalism. end quote.

I can’t help but think that, if this were to be attempted again, the outcome would probably be very similar. quote.

Some things have changed over the past 140 odd years but others remain pretty much as they were. While the M?ori economy, including iwi-owned businesses, now represents more than $40 billion too many M?ori are still denied equal access to loans and mortgages. end quote.

The implication in that last sentence is that the banks are biased against Maori. It is more likely that many Maori fail to meet the banks’ criteria, and those rules are in place to protect the bank – not to provide money to people who will not be able to pay it back. Non-Maori?are subject to these rules as well. quote.

A New Zealand owned bank for New Zealanders, be they M?ori or others, has been the dream and indeed the unfulfilled promise of too many politicians for too long. end quote.

Isn’t that what Kiwibank is for?

I am at a loss to understand what this bank would provide that banks do not provide already… unless it is loans that will probably never be paid back. That particular banking model does not have a strong chance of success as it won’t last more than a couple of years before taxpayers have to bail it out, one way or another.

Maybe it will offer special types of accounts. Could it offer the Koha account, where you put money in, but it is given to someone else? Or even the Taniwha account, where you have to keep putting money in ad infinitum, otherwise you will get hurt?

I apologise for not taking this idea very seriously, but a robust banking system is a cornerstone of our economic security. If more Maori want to borrow money to set up a business, or to buy a house, then they have to meet the banks’ criteria, like everyone else. A dedicated Maori bank is just another form of special treatment. Unfortunately, in the financial world, there is no special treatment that can avoid ruin, for Maori or for anyone else.