The financial regulator is stepping up lending requirements for people applying for new loans further increasing the difficulty in obtaining credit in the new loan market. Perspective borrowers will now have to provide extremely detailed information to be scrutinised regarding their spending habits and patterns. A long history of bank statements will need to be provided to lending institutions with spending on items such as pay tv, gambling, cigarettes and entertainment to be given greater scrutiny with a view to profiling borrowers on their lifestyle.
ASIC will update its responsible lending guidance to clearly spell out what it expects of lenders when someone applies for a mortgage, personal loan or credit card. The regulator plans to tell lenders they should generally use readily available forms of verifying information. If they choose not to do so, the lender will have to be able to explain why they did not obtain or refer to the information.