Federated Farmers vows to hold banks accountable after complaint dismissed
Federated Farmers is vowing to keep the big banks accountable for their actions and to continue pushing for meaningful change in the rural lending sector.
According to the filing, the bank allegedly breached lender responsibility principles, after multiple failures meant customers did not receive legally required information about their loans and, in some cases, agreed interest rate discounts.
Vanessa Horne, the Commerce Commission’s general manager, competition, fair trading and credit, says the Commission expects banks to invest in robust compliance practices to ensure they are compliant with the Credit Contracts and Consumer Finance Act 2003 (CCCFA).
Horne says banks’ failure to do so can have a detrimental effect on their customers and deprive people of crucial information they are entitled to.
The Commission says it believes Westpac failed to invest in adequate systems and processes to ensure it complied with its CCCFA obligations.
It states that these failures led to a lack of required disclosure to borrowers and guarantors and failing to apply agreed discounts to interest rates to some customers’ home loans.
The bank has subsequently admitted to the breaches and is finalizing its remediation for impacted borrowers.
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The Commission is seeking declarations that Westpac breached the responsible lending principles and pecuniary penalties. Westpac and the Commission entered into a settlement agreement prior to filing the proceedings to conclude matters on these terms.
The responsible lending principles impose obligations on lenders when advertising, before entering into a loan, and during all subsequent dealings with borrowers and guarantors.
