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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.


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BFCSA: Foreign banks 'distort' home loan market

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Foreign banks 'distort' home loan market

Australian Financial Review May 6, 2019 5.18pm

James Frost, James Eyers


Westpac says foreign banks and non-banks are creating “distortions” in the market as they chase market share unencumbered by the restrictions placed on mainstream lenders.

Westpac chief executive Brian Hartzer said he expected the situation to normalise, but for the time being the regulators remained almost exclusively concerned with the activities of the big four banks.

“We are certainly seeing very aggressive growth in the home loan market from foreign banks and I should also say non-banks” Mr Hartzer said.

“My sense is that regulators don’t like distortions in the market and this will return to normal over time.”

Westpac’s first-half result was marred by the comparatively weaker performance of the consumer bank, where cash earnings fell 11 per cent to $1.5 billion.

Net operating income fell 10 per cent from the previous corresponding half as interest income fell 4 per cent and fee income fell 32 per cent.

Chief financial officer Peter King singled out lower home loan growth as a key contributor to the weaker result.

“Loan growth was modest,” he said. “The dynamics of our growth reflect lower demand and competition from foreign and non-banks.”

Different standards

Non-banks, in particular, are not held to the same standard by the Australian Prudential Regulation Authority, which is very selective about the kinds of companies it allows to operate as an authorised deposit-taking institution in Australia.

The issues with foreign banks did not end there, with the bank also revealing it had an ongoing issue with the financial intelligence regulator AUSTRAC for failing to report international transactions made by correspondent banks to Westpac customers, including pension payments.

Westpac did not offer more detail about the nature of the issue other than saying the number of transactions was large but “low value” and happened in the institutional bank.

Mr Hartzer said the issue was reported at the bank’s full-year results, and Westpac took its anti-money laundering obligations seriously.

“There are issues here and there, but nothing I’d want to call out,” he said.

Managing the psychology of bankers

Two years ago, Commonwealth Bank agreed to a record-breaking $700 million fine for failing to report tens of thousands of transactions to the regulator on time, in accordance with the law.

Mr Hartzer said Westpac's bankers needed to face up to the new environment and address the risk being presented by the stricter interpretation of the lending laws.

“We do have to manage the psychology of our bankers so they are not running away too hard from the regulations and becoming overly risk-averse," he said.

The bank said it was in discussions with the Australian Banking Association about its concerns about changes to upcoming lending laws in the Regulatory Guide 209 Credit Licensing: Responsible Lending Conduct.

“There have been some unintended consequences in the application of the responsible lending laws to small business owners. Small business owners rely on using property as security when they look for a loan, and that has made it harder for them to borrow,” Mr Hartzer said.

The pressures facing banks, including regulatory uncertainty and stronger competition, were unlikely to abate and would continue to weigh on bank profits, he said.

“There is some continued uncertainty on regulation and elevated risk and compliance costs will persist for some time. Pressure is increasing both from customers and new competitors."



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