Batehaven doctor Peter Brandson says predatory lending is “very common”.
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In 2004 NAB gave one of his family members a substantial loan which Dr Brandson said was “totally unjustifiable”, based on the person’s income and assets.
But he said all banks did it to varying degrees.
“Banks caused the GFC by engaging in this type of inappropriate lending,” he said.
“We are talking about white collar crime on a grand scale.
“Everyone should get their loan application forms from their bank and check their details are correct – income, assets, etc.
“Bankers often alter these figures to make the loan appear acceptable, for example loan to value ratios are falsely lowered to less than 80 per cent.”
He said there were laws which were supposed to stop banks giving people loans they could not afford.
“The laws are often ignored by the banks and not enforced by the government,” he said.
“Many people who are given these excess amounts do not even realise the bank knew from the start that the client could not afford the loan.”
Dr Brandson said financial difficulties were one of the biggest causes of anxiety and depression.
“If you dig a bit deeper the issue is that people are struggling to keep their heads above water,” he said.
“To look after ourselves and our families is a difficult job, particularly if you have debts that are too much for you to bear.
“They get into trouble and they don’t realise they were given a loan inappropriately.”
A Parliamentary Inquiry is under way into the performance of the Australian Securities and Investments Commission, Australia’s corporate, markets and financial services regulator.
Its most recent report examines in detail the serious misconduct engaged in between 2006 and 2010 by financial advisers at Commonwealth Financial Planning Limited (CFPL), part of the Commonwealth Bank of Australia Group (CBA).
Dr Brandson made two submissions to the Inquiry, but says banks must be investigated with a wide-ranging Royal Commission.