Concerns from the Australian Securities & Investment Commission (ASIC) have resulted in Bank of Queensland (BOQ) changing its home loan assessment applications.
The changes come after ASIC expressed concerns about the banks practice of using a benchmark figure, the Henderson Poverty Index (HPI), to estimate the living expenses of consumers applying for home loans, rather than asking borrowers about their actual expenses.
ASIC believed the bank’s use of HPI (which is used as a measure for estimating the minimum amount of money families of different sizes need to cover basic essential needs) in that manner was not consistent with responsible lending obligations imposed by the National Credit Act.
In November 2014, ASIC updated Regulatory Guide 209 Credit licensing: Responsible lending conduct to clarify that credit licensees cannot rely solely on benchmark living expense figures, and must also make inquiries about the borrowers’ actual living expenses.
ASIC deputy chairman Peter Kell said the regulator was focused on ensuring lenders were acting responsibly.
“This outcome is part of ASIC’s ongoing focus on the lending industry’s compliance with responsible lending laws," Kell said.
“Lenders must carry out inquiries to determine whether a credit contract will be unsuitable for a consumer, using benchmark figures such as the Henderson Poverty Index alone to estimate a consumer's financial position is not sufficient to meet this requirement.”
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
Top Suburbs :
Get help financing your investment
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.
We value your privacy and treat all your information seriously - you can check out