ASIC has filed an appeal with the Full Federal Court of Australia against the decision of the Honourable Justice Perram regarding ASIC’s allegations against Westpac Banking Corporation (Westpac) for contraventions of responsible lending provisions of the National Consumer Credit Protection Act 2009 (Credit Act).
On 1 March 2017, ASIC commenced Federal Court proceedings alleging, during the period between December 2011 and March 2015, Westpac failed to properly assess whether borrowers could meet their repayment obligations before entering into home loan contracts (17-048MR).
On 13 August 2019, the Federal Court found Westpac had not breached the responsible lending provisions of the Credit Act, as Perram J decided that a lender ‘may do what it wants in the assessment process’ (19-210MR).
‘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. ASIC considers that the Federal Court’s decision creates uncertainty as to what is required for a lender to comply with its assessment obligation, nor does ASIC regard the decision as consistent with the legislative intention of the responsible lending regime. For those reasons, ASIC will appeal to the Full Court of the Federal Court’, said ASIC Commissioner Sean Hughes.
