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Australian court rejects responsible lending claims against Westpac
[SYDNEY] An Australian court dismissed a case by the corporate regulator against Westpac Banking on Tuesday over claims that the country's second-largest lender used inappropriate standards to approve thousands of mortgages.
Federal Court Judge Nye Perram ordered the regulator to pay costs after finding that the bank did assess applicants' expenditure before approving home loans.
"I reject this case on the facts," Justice Perram said in a published judgement. "Westpac did have regard to these declared living expenses."
The Australian Securities and Investments Commission (ASIC) has been trying to introduce more prescriptive lending rules following revelations of improper lending.
ASIC had alleged that Westpac, Australia's oldest bank, had breached laws on up to 262,000 home loans by using an automated process to determine expenses rather that assessing each person's living costs.
The judgement comes after the parties had already agreed to a A$35 million (S$32.8 million) settlement, which was rejected by the court.
Spokesmen for the bank and the regulator were not immediately available for comment.