asic.gov.au

ASIC found no systemic banking misconduct: lawyer

A LEADING banking industry lawyer has dismissed Denise Brailey's allegations in an article penned for a finance broker's website.

Jon Denovan, of Gadens Lawyers, told brokersnews.com that the Australian Securities and Investment Commission had said it had not identified widespread evidence of "systemic" misconduct in the banking sector along the lines suggested.

However, in relation to her claims of a potential for a significant amount of loan application fraud and lending maladministration for low-doc loans, he said only that the Senate Economics References Committee Post GFC Banking Sector Report had noted "that the regulation of low-doc lending changed with the introduction of the NCCP Act".

He said they were satisfied that the responsible lending obligations were having an impact.

"It was also noted that ASIC had requested Brailey, on a number of occasions, provide ASIC with additional information and specific evidence of misconduct in the banking sector, but that the evidence had not been provided,'' Mr Denovan wrote.

"The committee also made the point that, as a result of Brailey's website, a number of borrowers had written letters, generally making broad allegations of misconduct - but which failed to contain any specific evidence of wrong-doing.

"In its conclusion, the committee stated that it wishes to ensure regulatory settings in the financial sector encourage entrepreneurial activity and allow sufficient flexibility for parties to enter into agreements that best suit the particular circumstances of the operation.

"Rather than recommence … government intervention for small business finance, the committee considers it would be preferable for the industry to work on solving the evident problems."


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