BoQ moves to boost lending practices
The Bank of Queensland (BoQ) has moved to boost its lending practices after the Australian Securities and Investments Commission (ASIC) found they were not consistent with the National Credit Act.
ASIC reported it was concerned that BoQ was using a benchmark figure, the Henderson Poverty Index (HPI), to estimate the living expenses of consumers applying for home loans, instead of asking them about their actual expenses.
"In ASIC's view, the lack of enquiry about actual expenses, and sole reliance on HPI, was not consistent with responsible lending obligations imposed by the National Credit Act," the regulator said.
"Bank of Queensland has updated its home loan application forms to obtain more information about a customer's living expenses.
"The bank will carry out an assessment of the suitability of a loan using the higher of either the living expense figure supplied by the customer or an appropriate benchmark figure.
"ASIC notes that the bank will continue to review the circumstances of borrowers who go into hardship or default to ensure that they have not been disadvantaged by a loan provided prior to the change in policy."
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