New hearing for Westpac, ASIC over responsible lending

ASIC is squaring up for a responsible lending case against Westpac in May, after an embarrassing setback.

A judge rejected the penalty ASIC had agreed with Westpac. Pic: Hollie Adams

The corporate regulator is squaring up for a responsible lending case against Westpac Bank in May, after an embarrassing setback in the Federal Court last month.

It comes after the Federal Court last month refused to approve a $35 million civil penalty agreed by Westpac over breaches to responsible mortgage lending obligations.

The Australian understands the Australian Securities and Investments Commission and Westpac will now face a case management meeting on April 12 and then attend an eight day hearing starting on May 6.

Federal Court judge Nye Perram rejected the settlement between ASIC and Westpac in part because they couldn’t agree on the number of breaches.

Justice Perram said “admirable ingenuity” was used by both Westpac and ASIC in framing their legal arguments to “gloss over” differences in what was being admitted.

Westpac and ASIC had reached an agreement in September over the fine after the bank conceded it wrongly assessed people’s ability to repay mortgages by relying on a benchmark for customer expenses.

If approved by the Federal Court, it would have represented the largest civil penalty awarded under the National Credit Act.