Lenders should be asking customers to prove they will economize and afford loans by sending their children to public schools or cancelling their Netflix subscriptions under new responsible lending guidelines released on Monday. within the first major update to ASIC’s responsible lending guidelines since 2014. ASIC is seeking to scale back the instances of consumers being lured into taking over unsustainable loans.
The regulator has included 39 detailed examples to accommodate the changing business landscape which has included new sorts of employment and expenses.
Banks also are being told by ASIC to travel beyond a basic spending benchmark referred to as the Household Expenditure Measure or HEM when gauging the reliability of a customer’s submitted expenses.
ASIC concludes the HEM doesn’t include spending on an outsized number of expenses like medical bills, counselling services, life assurance , superannuation, HECS debts, lease payments, support payment and spousal maintenance.
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