ASIC exposes flaws in mortgage support mechanisms of big banks

Top Australian banks under fire for inadequate handling of hardship cases

ASIC exposes flaws in mortgage support mechanisms of big banks

The Australian Securities and Investments Commission (ASIC) has issued a call for improvement from the nation’s largest banks in their handling of customers facing mortgage payment difficulties.

Released on Monday, the ASIC report evaluates the responsiveness and support provided by 10 of Australia’s top home loan lenders. Findings indicate that these major banks frequently failed to follow up with customers who had requested help, often leaving them without necessary assistance. This neglect raised concerns about the adequacy of bank practices during financial hardships.

“This report highlights lenders must improve the way they deal with customers experiencing hardship,” ASIC chair Joe Longo said.

Included in the review were three of the big four banks—Commonwealth Bank of Australia, National Australia Bank Ltd., and Westpac Banking Corp.—as well as the growing Macquarie Bank Ltd. and several regional lenders.

The timing of this scrutiny is pivotal as financial regulators and investors gauge the effects of stringent monetary policies implemented by the central bank on bank customers. While the report notes a minimal increase in loan arrears among the largest banks, it also brings attention to potential vulnerabilities among smaller non-bank lenders in a competitive market.