NAB Responds To ASIC Demands Over Remote Lending Practices

www.Lawfuel.co.nz – Legal Jobs & News – The Australian Securities and Investments Commission (ASIC) has today welcomed a move by National Australia Bank (NAB) to tailor its lending practices in recognition of the special needs and circumstances of borrowers in regional and remote Indigenous communities.

ASIC’s Acting Executive Director of Consumer Protection, Ms Delia Rickard, said the changes follow a review of approximately 25 loans to borrowers in remote parts of
Far North Queensland, advanced by the bank during 2006.

‘ASIC examined a sample of loans taken out by Indigenous borrowers in the area. That examination led to wider concerns about NAB’s eligibility criteria and the potential for borrowers to be provided with loans they could not readily afford’, said Ms Rickard.

‘NAB responded constructively to those concerns, undertaking an extensive review of its lending guidelines for borrowers in regional and remote Indigenous communities, in consultation with ASIC.

‘NAB has now tailored its lending practices for remote parts of Australia and will shortly be introducing refined eligibility criteria which take into account factors associated with life in remote parts of Australia, such as higher living costs.’

Ms Rickard said that ASIC had visited Torres Strait Island communities with senior NAB staff. This visit had resulted in NAB undertaking a comprehensive program to assist remote communities in the Torres Strait, including:

• the development of a travelling bank where NAB employees would visit individual communities to provide banking and wealth advice;
• the development of local language assistance cards with tips for buying a car, avoiding bank fees and saving money; and
• a continued commitment to local sponsorships, such as the Torres Strait Football Cup.
Ms Rickard said NAB was reviewing individual loans that were the subject of ASIC’s initial review.

‘In cases where Indigenous borrowers were experiencing difficulty in meeting their repayments, NAB has been reviewing loan terms and working with those borrowers to find solutions on a case by case basis’, she said.

‘ASIC has welcomed NAB’s commitment to addressing the issues raised by the initial review. It’s important that borrowers in remote areas have continued access to mainstream credit providers.

‘All lenders should regularly review their lending guidelines, so they can adapt to changing circumstances, or new information, and ensure their lending practices are fair and effective’, said Ms Rickard.

NAB has advised customers experiencing financial difficulty in relation to a loan to call the bank on 13 22 65.

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