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The Australian Securities and Investments Commission will take Westpac to Federal Court over its responsible lending practices.
The watchdog said during December 2011 and March 2015, Westpac failed to properly assess whether borrowers could meet their repayment obligations before signing home loan contracts.
ASIC alleges Westpac used a benchmark instead of actual expenses declared by borrowers in assessing their ability to repay the loan, approved loans even when a borrower's ability to repay would leave them in deficit, and for home loans with an interest-only period, failed to have regard to the higher repayments at the end of the interest-only period.
Westpac states on its principles for responsible lending that its vision is to "be one of the world's great service companies, helping our customer communities and people to prosper and grow".
Westpac has been contacted for comment.
More to come.
Topics: law-crime-and-justice, company-news, business-economics-and-finance, consumer-finance, consumer-protection, corporate-governance, banking, australia