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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: Westpac ’ignored’ credit checks on loans, ASIC did too

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Westpac ’ignored’ credit checks on loans, ASIC tells court

The Australian 9:04pm May 13, 2019

Joyce Moullakis


Westpac breached the law by relying on benchmark industry expenditure measures to assess potential mortgage customers rather than using them as a “cross-checking tool”, the corporate regulator told Federal Court on Monday.

The Australian Securities and Investments Commission was making its closing statement before judge Nye Perram in an action against Westpac. It alleges the bank failed to properly verify the actual financial position of borrowers 261,987 times.

Jeremy Clarke SC, for ASIC, said Westpac in many cases “just discarded” information on customer expenses and reverted to a formulaic Household Expenditure Method.

“The HEM itself is not a reliable estimate of the particular consumer’s financial expenses,” he said. “We are saying they (Westpac) haven’t done the very first step” of considering the customer’s financial position.

But Justice Perram at one stage sounded unconvinced at ASIC’s argument. He mentioned that section 128 of the National Consumer Credit Protection Act, which covers the obligation to assess unsuitability of a loan, did not stipulate a lender seek out the “actual financial position” of the customer.

The case has the entire banking industry on tenterhooks as the court will decide whether the sector had appropriately been interpreting existing laws.

Last year’s Hayne royal commission and an ASIC review of responsible lending rules have already seen banks, including Westpac, move away from measures such as the HEM.

In his final report in February, Commissioner Kenneth Hayne noted a concerted shift by banks away from using benchmarks such as the HEM to assess a borrower’s ability to repay a loan, but said he would leave the interpretation of responsible lending to the court.

ASIC’s case centres on loans written by Westpac from 2011 to 2015.

Westpac argues that nothing in the governing legislation or regulation dictated that a loan suitability assessment had to be conducted in a prescriptive manner. The bank’s overall position is that it undertook the relevant assessment required by the law for the home loans during the period in question, having made the inquiries required by the NCCP Act.

But ASIC’s Mr Clarke told the court the HEM measure “cannot be relied on” for an assessment of a particular customer’s financial circumstances as it was a “cross-checking tool”.

“The statutory requirement is to conduct the suitability assessment,” he said, noting the HEM could be employed when expenses appeared grossly understated by a potential borrower.

Mr Clarke also said that Westpac hadn’t properly assessed borrowers’ ability to repay their interest-only loan when it reverted to principal and interest after a defined number of years.

“We say that right there is the contravention,” he said, adding that other tools within Westpac’s loan assessment system may have been relevant but didn’t address requirements under the law. “We say none of those other rules assess the question of affordability in the way that the Act required.”

ASIC’s closing statement cited a number of precedents, including a successful case in 2015 where the Federal Court handed to payday lender The Cash Store $19m in penalties for breaches of the responsible lending provisions and engaging in unconscionable conduct.

The Westpac-ASIC matter is before Justice Perram after an earlier $35m settlement of the case was knocked back by the court.

Last year, Westpac introduced more granular assessment measures for home loans with 13 new expense categories.

The hearing continues.



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