In the wake of yesterday’s revelation that the Australian Securities and Investments Commission (ASIC) has charged Westpac for irresponsible lending practices and will immediately commence civil penalty proceedings in the Federal Court, ASIC has revealed that it is investigating 11 lenders for dodgy practices. From The ABC:
ASIC’s senior executive responsible for banking, Michael Saadat, said the inquiries have been underway for a couple of years.
“It started really when we conducted our review of interest only loans in 2015,” he said.
“We looked at the conduct of 11 lenders, 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”…
ASIC said its action is intended to head-off possible future risks for consumers and the financial system.
“One of the aims of the responsible lending legislation is to enable ASIC to take action before the problems manifest themselves,” explained the regulator’s deputy chairman Peter Kell.
ASIC’s chairman Greg Medcraft said a key motivation for the regulator was to get other banks to change their ways.
“The issues is deterrence, and when you lodge a case it’s not just for that party, it’s to send a message to the broader sector,” he said.
Given the apparent breadth of the problem, as well as other recent instances of banking malfeasance, why not have one broad-ranging Royal Commission to address the sector in its entirety and drain the banking swamp once and for all?
