Community Law Centres will benefit after the final three banks agreed to increase their financial contributions.
The country's 24 community law centres receive a large proportion of their funding from the Lawyers and Conveyancers Special Fund.
Established in 1982, the fund collects interest from banks on solicitors' and licensed conveyancers' nominated trust accounts. The fund is vested in the New Zealand Law Society and the New Zealand Society of Conveyancers jointly and is held by them in trust for the purposes specified in the Act.
The Act allows banks to retain 40% of the interest payable on nominated trust accounts. After deduction of that amount, the banks are required to pay the remainder to the Special Fund Management Committee.
After deduction of administration expenses including an audit fee, the balance in the fund is paid to the Secretary of Justice for the purpose of funding community law centres.
BNZ and TSB have already agreed to lower their retention to 20% after recognising their declining cost of administration due to advanced computerised collection, and donate the other 20% to community law.
Today, the remaining banks, ANZ, ASB and WESTPAC that are involved in administering the Lawyers and Conveyancers' Special Fund announced a new partnership with Community Law.
That will result in the bank trio making an annual multi-million dollar donation to Community Law.
Community Law Centres o Aotearoa Co-Chair Cameron Madgwick says it's a clear demonstration of social responsibility by the banks and their commitment to a healthy civil society.
"For the last 25 years, in an effort to assist Community Law and in accordance with relevant legislation, banks have paid interest from solicitors' nominated trust accounts to a Lawyers and Conveyancers Special Fund. Interest is not normally paid to lawyers and conveyancers on such accounts. Each year around $6 million is paid by the major banks to this fund and that amount helps to fund Community Law Centres," he says.
The New Zealand Law Society's annual report for the year to 30 June 2015 shows that $6.862 million dollars was paid to the Secretary of Justice in the year to 30 June 2015.
Mr Madgwick won't say whether the ANZ, ASB and WESTPAC banks have matched the lower interest retention of 20% in line with BNZ and TSB.
"It's a confidential agreement but you can be assured their contribution is a multi-million dollar annual figure," he says.
The Associate Justice Minister Simon Bridges has welcomed the move by the three major banks.
"The banks are to be applauded for this additional support for community law centres," he says.