Australian banks blame tighter credit checks for home loan decline

Applications dwindled despite unchanged loan success rate.

Reuters reported that ANZ Bank and NAZ have attributed slower growth in home loans to the ongoing crackdown on consumer credit checks.

“Most borrowers who previously would have qualified for a home loan continue to qualify for a home loan. But potential borrowers needed to verify up to 13 claims about their spending,” NAB interim CEO Philip Chronican told a hearing of parliament’s House of Representatives economics committee.

Also read: Falling home prices to drag Australian banks' 2019 credit growth to 3.5%

This was echoed by ANZ CEO Shayne Elliott, who said that tougher application of lending standards meant some borrowers would find it harder to borrow.

Although the home loan application success rate remained unchanged from a year earlier, application numbers have dropped n, added NAB CFO Gary Lennon

Consumer credit checks became mandatory in Australia in 2012.

Here’s more from Reuters.