ASIC prepares for HEM 2.0

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Via AFR:

The Australian Securities and Investments Commission (ASIC) has released updated guidance on how banks should verify customers living expenses before lending, to meet its expectations regarding the responsible lending laws.

Lenders using the Household Expenditure Measurement (HEM) as a benchmark will need to apply a “reasonable buffer” reflecting the benchmark is too low.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.