On 1 March 2017, the Australian Securities and Investment Commission (ASIC) commenced Federal Court proceedings against Westpac Banking Corporation (Westpac) alleging contraventions of the responsible lending provisions of National Consumer Credit Protection Act 2009 (Cth) (the National Credit Act).
The National Credit Act provides consumer protections to ensure that credit providers make reasonable inquiries about a borrower's financial situation and assess whether a loan contract will be unsuitable for the borrowers.
ASIC alleges that alleges that Westpac lending failed to properly assess whether customers could meet their repayments before entering into home loan contracts between December 2011 and March 2015
Specifically, ASIC alleges that Westpac:
- used a benchmark instead of the actual expenses declared by borrowers in assessing their ability to repay the loan
- approved loans where a proper assessment of a borrower's ability to repay the loan would have shown a monthly deficit
- for home loans with an interest-only period, Westpac failed to have regard to the higher repayments at the end of the interest-only period when assessing the borrowers' ability to repay.
ASIC is asking the Federal Court to declare that Westpac breached the law and impose a pecuniary penalty.
If you received a Westpac home loan that you’re struggling to repay or you have defaulted, you may have a claim and you should get advice about your rights.
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