Invest
How much is the wagyu and shiraz case costing taxpayers?
ASIC has disclosed the preliminary legal bill for its responsible lending case against Westpac.
How much is the wagyu and shiraz case costing taxpayers?
ASIC has disclosed the preliminary legal bill for its responsible lending case against Westpac.
The case centred on Westpac’s use of an automatic process to approve hundreds of thousands of home loans, substituting would-be borrowers’ actual living expediter for a relatively low benchmark, the Household Expenditure Measure.
In his judgment last year, Justice Perram found that a customer’s current living expenses weren’t an important indicator of whether they could afford the loan, contending expenses could be cut if necessary.
The Australian Securities and Investments Commission (ASIC) has revealed that its proceedings against Westpac Group for alleged breaches of responsible lending have cost taxpayers at least $1.83 million.
The costs include expenses from a pre-litigation investigation of Westpac’s conduct, as well as charges associated with proceedings in the Federal Court and the regulator’s appeal to the Full Federal Court.
However, the costs exclude Westpac’s litigation expenses, which the court ordered ASIC to pay after its appeal was dismissed.
ASIC stated that Westpac is yet to disclose its expenses to the corporate regulator.
The litigation costs were revealed in a response to a question on notice from Liberal senator and chair of the parliamentary joint committee on corporations and financial services, James Paterson, from a public hearing held last month.
The public hearing was held prior to ASIC’s decision to accept the Full Federal Court’s judgement, which the regulator had considered appealing to the High Court.
Senator Paterson had questioned whether a move to take the matter to the High Court would be counterintuitive.
“As we’ve discussed in this case previously, it’s ASIC’s aspiration to have clarity in the law and that’s what you said the appeal could provide,” he said.
“Obviously, that clarity could also be provided by ASIC accepting the court’s ruling of what the law is.
“Now that you’ve appealed once and been unsuccessful, is it really wise for ASIC to create further uncertainty with another appeal?”
The regulator has since announced that in light of the Full Federal Court’s decision, it would review its updated regulatory guidance and consider the implications of the Federal Court’s decision on compliance practices.
ASIC issued its new guidance in December 2019, after holding two rounds of public consultation with industry stakeholders.
The principles-based guidance was designed to provide lenders with greater clarity and flexibility amid uncertainty off the back of scrutiny from the banking royal commission.
However, ASIC has stressed that prospective reforms of the National Consumer Credit Protection Act to further clarify the enforcement of responsible lending obligations is “ultimately a matter for the federal government and Parliament”.
RELATED ARTICLES
About the author
About the author
Shares
DREST gears up for innovation with the appointment of new co-CEO and CTO
Luxury fashion and lifestyle mobile game DREST has announced significant leadership changes as it prepares for an exciting phase of development and expansion. Read more
Shares
Hope for investors scared by share and crypto crashes
As share markets and cryptocurrency take a beating following the tightening of monetary policy across the world, investors are contemplating their next move. Read more
Shares
Cannon-Brookes tries to block AGL demerger
Mike Cannon-Brookes is not giving up on AGL after the latter announced 15 June as the date of the demerger vote. Read more
Shares
Qantas set to acquire Alliance Aviation
The two airlines have entered into a scheme implementation deed. Read more
Shares
Bond and share investors may shrug off RBA’s rate hike
As mortgage holders reel from the prospect of having to reach deeper into their hip pockets to make bigger repayments following the Reserve Bank of Australia’s (RBA) interest rate hike from 0Read more
Shares
How to buy Shares: A beginner’s guide in 2022
So you want to get in on the stock market action? Congratulations, that’s an exciting step! But first, there are a few things you should know before you buy your first shares. Read more
Shares
Elon Musk chokes up on bid to swallow Twitter
The battle of the bird has intensified over the last week, as Tesla and SpaceX founder Elon Musk has ramped up his aggressive campaign to buy the entirety of social media giant, Twitter. Read more
Shares
How to Make Money in Short Selling
What is short selling? There is a common practice for people who actively trade in the stock market, which is to “buy low and sell high”, but what if you can still make money by doing the opposite? Read more
Shares
DREST gears up for innovation with the appointment of new co-CEO and CTO
Luxury fashion and lifestyle mobile game DREST has announced significant leadership changes as it prepares for an exciting phase of development and expansion. Read more
Shares
Hope for investors scared by share and crypto crashes
As share markets and cryptocurrency take a beating following the tightening of monetary policy across the world, investors are contemplating their next move. Read more
Shares
Cannon-Brookes tries to block AGL demerger
Mike Cannon-Brookes is not giving up on AGL after the latter announced 15 June as the date of the demerger vote. Read more
Shares
Qantas set to acquire Alliance Aviation
The two airlines have entered into a scheme implementation deed. Read more
Shares
Bond and share investors may shrug off RBA’s rate hike
As mortgage holders reel from the prospect of having to reach deeper into their hip pockets to make bigger repayments following the Reserve Bank of Australia’s (RBA) interest rate hike from 0Read more
Shares
How to buy Shares: A beginner’s guide in 2022
So you want to get in on the stock market action? Congratulations, that’s an exciting step! But first, there are a few things you should know before you buy your first shares. Read more
Shares
Elon Musk chokes up on bid to swallow Twitter
The battle of the bird has intensified over the last week, as Tesla and SpaceX founder Elon Musk has ramped up his aggressive campaign to buy the entirety of social media giant, Twitter. Read more
Shares
How to Make Money in Short Selling
What is short selling? There is a common practice for people who actively trade in the stock market, which is to “buy low and sell high”, but what if you can still make money by doing the opposite? Read more
