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Deposit Takers Act 2023

Crisis management and resolution - Moratorium and restriction on resolution trigger

284: Moratorium

You could also call this:

"Protection for troubled banks: what you can't do when they're in financial difficulty"

Illustration for Deposit Takers Act 2023

If a licensed deposit taker is in trouble, you cannot take certain actions against it. You cannot start or continue a court case against it, or try to enforce a judgment or order against it. You also cannot try to put it into liquidation or take control of its property.

When a licensed deposit taker is in trouble, there are things you cannot do to its property, such as selling it or taking possession of it. You also cannot use a mortgage or other security interest to take control of its property. Additionally, you cannot try to take back property that the deposit taker has, even if you have a valid reason to do so.

There is an exception to these rules, which says that the Bank can still do its job and use its powers under this Act. This section is also subject to section 421(1) to (3), which means that those sections can affect how this section works.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS530879.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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283: Application of resolution provisions to other persons in resolution, or

"Rules for some businesses also apply to other related people in similar situations."

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285: Period of moratorium, or

"Time limit for helping a troubled deposit taker sort out its problems"

Part 7Crisis management and resolution
Moratorium and restriction on resolution trigger

284Moratorium

  1. If a licensed deposit taker (A) is in resolution, no person may do any of the following:

  2. commence or continue a proceeding, including a proceeding by way of counterclaim, against A:
    1. issue an execution, attach a debt, or otherwise enforce or seek to enforce a judgment or an order obtained in respect of A:
      1. take any steps to put A into liquidation or voluntary administration:
        1. enter into possession of, sell, or appoint a receiver of A’s property or property in respect of which A has an equity of redemption:
          1. exercise or continue a power or rights under, or in accordance with, a mortgage, charge, debenture, instrument, or other security interest over A’s property:
            1. claim or recover, under a retention of title clause, hire purchase agreement, mortgage, lease, or security interest, any property in A’s possession:
              1. determine or forfeit a tenancy, retake or re-enter premises, or exercise or continue a power or rights under or in connection with a lease, against A:
                1. exercise a right of set-off against A.

                  1. Nothing in subsection (1) limits or prevents the Bank from performing or exercising any functions, powers, or duties under this Act.

                  2. This section is subject to section 421(1) to (3).

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