Westpac adjusts credit policy for COVID-19

by Madison Utley29 Apr 2020

Westpac has announced a series of changes to its consumer credit policy to enable the bank to continue aiding customers in purchasing properties in a “responsible and sustainable way” throughout the COVID-19 crisis. 

The most significant change concerns the income verification process; as of tomorrow, 30 April, all PAYG and casual employees must provide more recent proof of income for servicing a prospective loan.

Under the updated policy, the latest payslip or other relevant document must be no more than 14 days old, or one month old for monthly pay cycles, at the time of application submission in ApplyOnline.

However, the major acknowledged this could be complicated for applicants who are self-isolating; in these instances, a previous payslip combined with current salary credit evidence may be used, but only where the salary credit is greater than or equal to the payslip net payment.

Further requirements are being introduced for self-employed income verification as well.

In order to verify income for all self-employed applications, additional documentation is required including last quarter BAS, the BAS from the corresponding quarter the year before, and the last three months’ bank statements and transaction summaries. There are then three new conditions which must be met to proceed with assessing the application.

For applications not yet submitted, brokers must facilitate conversations with their customers regarding whether their financial position has been impacted by recent events around the COVID-19 pandemic; this discussion must be summarised in the ApplyOnline application submission notes.

Brokers are also responsible for checking that revenue in the BAS from the latest quarter is greater than or equal to the comparative sales figures shown in the same quarter BAS of the prior year.

Lastly, the broker must review business transaction statements to confirm the business is still trading, there are no adverse indicators present, there is no evidence of undisclosed liabilities and income has not been reduced.

As of this week, Westpac has published its credit policy on a new platform, Oracle Knowledge Advanced (OKA). While it will still be available through Westpac Broker Net as well, the new system has an enhanced search capability and is intended to minimise the need for brokers to reach out to broker support for a credit policy query.