Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

Borrow

Court finds no breach of responsible lending by big 4 bank

By Grace Ormsby · August 13 2019
Reading:
egg
egg
egg
Westpac

Court finds no breach of responsible lending by big 4 bank

author image
By Grace Ormsby · August 13 2019
Reading:
egg
egg
egg
Westpac

One of Australia’s largest banks has been found not to have breached responsible lending obligations in its provision of home loans to customers, despite ASIC allegations.

The Federal Court of Australia’s Justice Nye Perram has dismissed the Australian Securities and Investment Commission’s (ASIC) action against Westpac, after the two parties had jointly approached the Federal Court to seek orders that the bank had contravened relevant responsible lending provisions.

It comes after Westpac admitted to breaches of responsible lending obligations in September 2018 and subsequently agreed to pay a $35 million civil penalty to resolve the Federal Court proceedings. 

In making his decision, Justice Perram consulted with a friend of the court to consider whether the case even constituted a breach of national credit provisions, stating that there were no facts before him to demonstrate that any unsuitable loans were approved.

ASIC had alleged Westpac breached responsible lending laws in the assessment of 260,000 approved home loans between December 2011 and March 2015 using an automated decision system.

Advertisement
Advertisement

For a further 50,000 home loans, ASIC had alleged that Westpac had received, but not used, consumers’ actual expense information than the Household Expenditure Measure.

The regulator also argued that Westpac had used an incorrect method to assess consumer capacities to repay home loans at the end of the interest-only period.

As a result of the approval process in use by Westpac, ASIC had contended that the bank should not have automatically approved around 10,500 of the loans.

According to Nest Egg’s sister site, Mortgage Business, the civil penalty, if approved, would have been the largest civil penalty ever awarded under the National Credit Act.

Court finds no breach of responsible lending by big 4 bank
Westpac
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article
author image

About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

From the web

Recommended by Spike Native Network

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Copyright © 2019 MOMENTUM MEDIA