Westpac is set to pay a $35 million penalty in a case settlement over more than 10,000 “irresponsible” home loans.
The bank admitted to breaching the National Consumer Credit Protection Act by failing to collect the necessary customer data, such as declared living expenses, and/or miscalculating the borrowers’ ability to repay the loan.
The Australian Securities and Investments Commission (ASIC) said this breach affected 100,000 home loans between 2011 and 2015, and about 10,500 of these loans should not have been automatically approved.
“This is a very positive outcome and sends a strong regulatory message to industry that noncompliance with the responsible lending obligations will not be tolerated,” said ASIC chairman James Shipton.
“Lenders must then verify the information to ensure that it is true, and then assess whether the loan is unsuitable for the borrower.”