ASIC to appeal Westpac responsible lending decision
The corporate watchdog has appealed with the Full Federal Court of Australia against the decision regarding allegations against Westpac Banking Corporation for contraventions of the National Consumer Credit Protection Act 2009 (Credit Act).
The Australian Securities and Investments Commission (ASIC) said the court’s decision created uncertainty as to what was required for a lender to comply with its assessment obligation.
ASIC commissioner Sean Hughes said ASIC did not regard the decision as consistent with the legislative intention of the responsible lending regime.
“The Credit Act imposes a number of legal obligations on credit providers, including the need to make reasonable inquiries about a borrower’s financial circumstances, verifying information obtained from borrowers and making an assessment of whether a loan is unsuitable for the borrower,” he said.
Last month, the Federal Court found Westpac had not breached the responsible lending provisions of the Credit Act and decided that a lender “may do what it wants in the assessment process”.
At the time, Hughes said ASIC took on the case because of the need for judicial clarification of a cornerstone legal obligation on lenders and “this is why ASIC refers to this case as a ‘test case’”.
ASIC had alleged that during December 2011 and March 2015, Westpac failed to properly assess whether borrowers could meet their repayment obligations before entering into home loan contracts.
Recommended for you
Licensee Centrepoint Alliance has completed the acquisition of Brighter Super’s annual review service advice book, via Financial Advice Matters.
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
