Oh boy. ANZ is preparing for tough times, via the AFR:
…From November 25 the bank will be using new “comprehensive credit reporting” checks by having third-party agencies check on applicants’ credit card, home, personal, or car loan debt.
In addition, mortgage brokers will be required to provide “enhanced verification” about applicants’ income and rental expenses. This will include more details about changes to financial circumstances, including impending retirement. More details will be asked for about living expenses and any other commitments.
Brokers will asked to look out for any signs of financial hardship, including late payments, overdrawn accounts, gambling and pay day lender transactions.
The bank will also require segmented proof of income divided by overtime, bonuses and part timers will have to show six months employment.
We saw Westpac lead this off a few months ago but nothing like this. This is material tightening of lending standards. Especially in Australia’s freshly-minted part time economy. Indeed, we can say that ANZ is breaking the “prisoner’s dilemma” here by panicking first. It will have better lending standards than the other banks but, if they follow and they ought to, then all will sink through acting rationally as individuals.
That it came the same day that Amateur Treasurer Frydenberg begged for loosening standards tells you all you need to know about where the bank’s heads are at.