Borrow
Court finds no breach of responsible lending by big 4 bank
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.

Court finds no breach of responsible lending by big 4 bank
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.
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 nestegg’s sister site, Mortgage Business, the civil penalty, if approved, would have been the largest civil penalty ever awarded under the National Credit Act.
About the author

About the author


Banking
368k Australians potentially eligible for Westpac class action: Are you one of them?
The Federal Court is set to notify 368,000 Australians that they might be eligible to join a consumer credit class action against the big four bank. ...Read more

Banking
Government introduces royal commission laws
The government is striving to implement a number of the royal commission recommendations in a package that was recently introduced to Parliament. ...Read more

Banking
ANZ cops $10m penalty for wrongful fees
The Federal Court of Australia has found that banking giant ANZ engaged in unconscionable conduct and breached its obligations as a financial services licensee. ...Read more

Banking
How $800m could make banking better
The federal government’s digital business plan to drive Australia’s economic recovery “will make banking faster and easier”, according to an industry group. ...Read more

Banking
How sneaky fees could be costing you hundreds
As many as a quarter of Australians are being stung with unknown, unfair or incorrect banking fees, with the costs adding up during the COVID-19 pandemic, an expert has revealed. ...Read more

Banking
Westpac hit with biggest fine in corporate history
Australian banking and financial services giant Westpac has reached an agreement with AUSTRAC to pay $1.3 billion for breaching anti-money laundering and counter-terrorism financing laws. ...Read more

Banking
6 ways to know you need a new bank
Unhappy with your current bank? Here’s how to know if you need to make a change. ...Read more

Banking
The banks beating the big 4 when it comes to customer satisfaction
Midsize banks are the biggest winners in a new survey of bank customer satisfaction. ...Read more

Banking
368k Australians potentially eligible for Westpac class action: Are you one of them?
The Federal Court is set to notify 368,000 Australians that they might be eligible to join a consumer credit class action against the big four bank. ...Read more

Banking
Government introduces royal commission laws
The government is striving to implement a number of the royal commission recommendations in a package that was recently introduced to Parliament. ...Read more

Banking
ANZ cops $10m penalty for wrongful fees
The Federal Court of Australia has found that banking giant ANZ engaged in unconscionable conduct and breached its obligations as a financial services licensee. ...Read more

Banking
How $800m could make banking better
The federal government’s digital business plan to drive Australia’s economic recovery “will make banking faster and easier”, according to an industry group. ...Read more

Banking
How sneaky fees could be costing you hundreds
As many as a quarter of Australians are being stung with unknown, unfair or incorrect banking fees, with the costs adding up during the COVID-19 pandemic, an expert has revealed. ...Read more

Banking
Westpac hit with biggest fine in corporate history
Australian banking and financial services giant Westpac has reached an agreement with AUSTRAC to pay $1.3 billion for breaching anti-money laundering and counter-terrorism financing laws. ...Read more

Banking
6 ways to know you need a new bank
Unhappy with your current bank? Here’s how to know if you need to make a change. ...Read more

Banking
The banks beating the big 4 when it comes to customer satisfaction
Midsize banks are the biggest winners in a new survey of bank customer satisfaction. ...Read more