ASIC review brings NAB changes for indigenous loans
Tuesday January 15, 2008
The Australian Securities and Investment Commission (ASIC) has welcomed an announcement by the National Australia Bank (NAB) that it will now, "tailor its lending practices in recognition of the special needs and circumstances of borrowers in regional and remote Indigenous communities,"
ASIC's Acting Executive Director of Consumer Protection, Ms Delia Rickard, said, "ASIC examined a sample of loans taken out by Indigenous borrowers in the area (far north Queensland, Torres Strait Island). That examination led to wider concerns about NAB's eligibility criteria and the potential for borrowers to be provided with loans they could not readily afford', said Ms Rickard.
"NAB responded constructively to those concerns, undertaking an extensive review of its lending guidelines for borrowers in regional and remote Indigenous communities, in consultation with ASIC."
"NAB has now tailored its lending practices for remote parts of Australia and will shortly be introducing refined eligibility criteria which take into account factors associated with life in remote parts of Australia, such as higher living costs."
Having visited the area with senior NAB staff, the bank had undertaken a commitment to provide a mobile bank that would see NAB employees visit individual communities to provide banking and wealth advice.
Everyday banking information would also be translated into the local language to help the community with tips for buying a car, and how to avoid bank fees.
The NAB is currently reviewing individual unsecured personal loans that were the subject of ASIC's initial review and are working with indigenous borrowers on a case by case basis to help them repay their loans.
"ASIC has welcomed NAB's commitment to addressing the issues raised by the initial review. It's important that borrowers in remote areas have continued access to mainstream credit providers."
"All lenders should regularly review their lending guidelines, so they can adapt to changing circumstances, or new information, and ensure their lending practices are fair and effective', said Ms Rickard.
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