Plain language law

New Zealand law explained for everyone

Deposit Takers Act 2023

Depositor compensation scheme - Entitlement to compensation - Payment of entitlements

225: Protected deposit subject to security interest

You could also call this:

"Your protected deposit is still safe, even if someone else has a claim on it."

Illustration for Deposit Takers Act 2023

When you have a protected deposit, it is covered by this law, even if someone else has a claim on it. If someone has a claim on your protected deposit, but you get compensation for it, that compensation belongs to you and not to the person with the claim. This rule applies even if other laws, like the Personal Property Securities Act 1999, say something different.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS678338.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
Previous

224: Restrictions on entitlement to compensation under scheme, or

"You can't get more than one payout for the same protected deposits."

Next

226: Recovery of compensation paid in excess or in error under scheme, or

"Paying back extra or mistaken compensation to the Bank"

Part 6Depositor compensation scheme
Entitlement to compensation: Payment of entitlements

225Protected deposit subject to security interest

  1. This Part applies regardless of whether the protected deposit is subject to a security interest.

  2. If a protected deposit is subject to a security interest in favour of the licensed deposit taker that issued the deposit, any compensation paid in respect of the deposit is not subject to the security interest.

  3. This section applies despite anything to the contrary in the Personal Property Securities Act 1999 or any other legislation, instrument, or other rule of law.