The Australian Securities & Investments Commission (ASIC) has revealed the recent action against Westpac involved investigating the home loan practices of a total of 11 lenders.
Appearing before the Senate Economics Committee today, ASIC’s senior executive responsible for banking Michael Saadat
has said the enquiries have been conducted for a number of years, reports ABC News
“It started really when we conducted our review of interest only loans in 2015,” he told the committee.
“We have announced action against Westpac but we have been in discussions with other lenders and we hope to make an announcement about the work that we've been doing with other lenders in the next few weeks.”
Saadat told the committee that Westpac had changed its lending practices after ASIC made these concerns known back in 2015.
“Despite the fact that they stopped the practice ... we’ve decided to bring this action because of the importance of the issues that it raises,” he said.
In a statement released yesterday, Westpac said it will defend Federal Court proceedings commenced by ASIC in relation to the home loan allegations.
All loans identified by ASIC were “currently meeting or ahead in repayments,” the bank stated.
“It is not in the bank’s or customers’ interests to put people into loans that they cannot afford to repay. It goes hand in hand that we have robust credit approval processes while helping customers purchase their home,” Westpac Group, chief executive of consumer bank, George Frazis said.
The bank’s credit policies are informed by a “deep experience and understanding” of the Australian mortgage market, he added.
“They include a consideration of customers’ specific circumstances, including income and expenditure, previous repayments history and the overall customer relationship. We build into our processes a range of conservative inputs, including the addition of buffers to take into account possible future interest rate increases.”