ASIC has today commenced civil penalty proceedings in the Federal Court against Westpac Banking Corporation (Westpac) for a number of contraventions of the responsible lending provisions of National Consumer Credit Protection Act 2009 (Cth) (the National Credit Act).
ASIC alleges that in the period between December 2011 and March 2015 Westpac failed to properly assess whether borrowers could meet their repayment obligations before entering into home loan contracts.
Specifically, ASIC alleges that Westpac:
- used a benchmark instead of the actual expenses declared by borrowers in assessing their ability to repay the loan
- approved loans where a proper assessment of a borrower’s ability to repay the loan would have shown a monthly deficit
- for home loans with an interest-only period, Westpac failed to have regard to the higher repayments at the end of the interest-only period when assessing the borrowers’ ability to repay.
The National Credit Act provides consumer protections to ensure that credit providers make reasonable inquiries about a borrower’s financial situation and assess whether a loan contract will be unsuitable for the borrowers.
The first hearing for the proceedings will be on 21 March 2017 at 9.30am in the Federal Court in Sydney.
ASIC will be making no further comment at this time.
What if this is just the tip of the iceberg? Let’s have a banking royal commission to find out.
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A class action will inevitably follow.
Perhaps a long position on Slater and Gordon at this time !
lol good luck with that, seen the share price lately? https://www.google.com/finance?q=ASX:SGH
If I hear of one, I will be contacting the relevant people to present the evidence Ive obtained in the last 12 months of fraudulent activity
Meh. Will blow over like that alien spaceship burning up over Tasmania that has been given an “official” explanation as being just a contrail in the morning sun. All things of beauty really.
Time for a Royal Commission into Australian banks:-
Their operations,
Their links to the Real Estate Lobby,
The implications of any impropriety or activity by banks on the Australian Real Estate sector and the Australian Economy
Any motivations for their behaviours by the Reserve Bank of Australia
Any motivations for their behaviours by any Australian government regulatory body
Their links to past and present Members of Parliament
Their links to Foreign Nationals and any involvement they may have with money laundering by Foreign Nationals
….Just a few short weeks ago the PM was out there suggesting there was no need for a Royal Commission. Now one of them is under investigation.
The banks have benefited handsomely from a guarantee for their deposits made by the Australian government in 2008. It is time for them to account for themselves.
The findings and recommendations will be exactly like the recently completed Irish Inquiry – well worth a read!
Can you give me the high level details or a link to the report?
Why? We have the best banks in the world, and the best regulators. Just because it took them over 3 years to discover these practices, and another two to bring charges…
Ms Kelly got her bonus every year …..and is out safely with the dosh
….suspect that ice berg is yuuuuuuge ! All the punters can now say it’s not their fault if they can’t pay the $million mortgage …..”the bank made me do it “
This is why we need a Royal Commission.
That said – she would have to appear at these proceedings as well I suspect.
Meh..I can’t recall…I can’t recall….I can’t recall…
It’s going to get very ugly. Savers will bear the brunt of the hit, bailing out the banks. Best precaution is to take your money out of the big 4.
+1
And that’s 18 yays btw. 🙂
Greens organising a Commission of Inquiry which already has support from some conservatives: http://greens.org.au/banking
Anyone who isn’t working at one of the big four is literally out of their minds remaining in this country.
First I LOL’d at the thought of everyone working at the big 4, making loans to each other in a big circle jerk.
Then I QQ’d because I realised it’s the future.
Didn’t Westpac get some consultants to clear them of any wrong doing?
That’s where they failed you see, should have done what CommBank did and commissioned a local indepdent body to provide a report showing “It’s all good bro, they do good loans and shit”.
Here’s hoping for an irresponsible borrowing audit. Anything above 4x HH income is a candidate, especially those who commit criminal fraud to acquire debt.
Big Short
Then they want to look into mortgage brokers that fudged figures on loan applications as well as applicants that fudged their own numbers.
What will happen with Westpac is a fine, slap on the wrist, no one goes to jail then yesterdays news. Then, in other news, some famous prick did something awesome.
Tip of the iceberg lettuce.
funnily enough elton john doesn’t like iceberg lettuce………
he’s a rocket man!
boom boom!
cos everything cos too much these days!
this takes all the romaines out of banking.
ok i’ll leaf it alone now.
Will be his impact bank funding costs? If so it could be the first domino to go.
My family member works for a big 4 bank … in the government relations in team. They are preparing all the tone for this commission. They suspect it is coming and are getting on the front foot.
So what are they doing?
Burning all the evidence?
Interesting that these purported credit actions happened under the reign of Frau Kelly.
The same person who ‘brought her bank to Westpac’ in the run up to 09/08, as St. George had recklessly lent in such markets as Perth [far from the Kogarah Homeland].
‘Computer says “yes” ‘ http://www.abc.net.au/news/2017-03-01/westpac-landmark-federal-court-case-over-lending-practices/8316138
Let justice prevail.
Nothing to see here. They’ll just cry that all the “suspicious” applications were from mortgage brokers and processed through their offshore call centre.
They adhered to the standard of vetting 1 in x number of applications. This one “slipped through the cracks”.
Meanwhile, in India, at the outsourced call centre, Amit in the Westpac team will get the shaft, or possibly his team leader, Apu. Maybe the whole team! It is of no consequence.
The mortgage broker will get a stern letter, or perhaps even investigated or fined.
The bank will emerge from the fray, wearing their teflon jacket, their arse shield, and looking awesome.
Yeah… This scenario is actually pretty accurate I suspect.
I can assure you 1000% everything will be fine…………until finally the ass falls out of east coast dogboxes and then, it will be on for young and old as to whose fault it was.
Have a read on Google about Storm Financial.
https://www.google.com.au/search?q=storm+financial+asic&newwindow=1&source=lnms&tbm=nws&sa=X&ved=0ahUKEwikm6nvrLbSAhWJfbwKHTNrC0YQ_AUICCgB&biw=819&bih=530
Can anyone explain why this is a CIVIL case and not a CRIMINAL case?
I’m not a lawyer but surely if it is ASIC prosecuting a breach of law then it is a criminal matter. Have I got this wrong? It just seemed odd to me.
Because the breach to the National Credit Act only stipulates it as a civil breach.
If fraud is found through a banking inquiry, then you have a criminal law suit on your hands.
ok,right
haha, that right
right, again