ASIC sues NAB for unlicensed home loan introducers
In one of the first pieces of litigation as a result of the Royal Commission, the Australian Securities and Investment Commission (ASIC) has sued the National Australia Bank (NAB) for dealing with unlicensed home loan introducers.
ASIC alleged NAB breached s31(1) of the National Consumer Credit Protection Act 2009 (National Credit Act), which prohibited credit licensees from conducting business with parties engaged in credit activity without an Australian credit licence (ACL).
It was alleged by ASIC between 3 September 2013 and 29 July 2016 NAB accepted information and documents in support of consumer loan applications from third party introducers who were not licensed to engage in credit activity.
The proceedings would be listed for directions on a date to be determined by the Federal Court and the maximum penalty for one breach of the National Credit Act was 10,000 penalty units which equates to $1.7-1.8 million.
ASIC also alleged NAB breached its obligations under s47 of the National Credit Act requiring it to engage in credit activities efficiently, honestly and fairly and to comply with the Act.
The proceedings related to the conduct of 16 bankers accepting loan information and documentation from 25 unlicensed introducers in relation to 297 loans.
One of the National Credit Act’s key objectives was consumer protection and the imposition of a licensing regime was intended to address concerns third-party referrers may misrepresent consumers financial details to ensure loans were approved for their own benefit.
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