The Australian Securities and Investments Commission (ASIC) has launched legal action against National Australia Bank (NAB) and its subsidiary AFSH Nominees (AFSH) for failing to process 345 hardship applications within the legally required timeframe.
Documents filed in the Federal Court this week allege that between 2018 and 2023, the Australian financial institutions did not meet their obligation to respond to these applications within 21 days timeframe mandated by law.
ASIC Chair Joe Longo said: “We allege NAB unlawfully failed to respond to their customers’ appeal for help when they needed them most.
“These customers included people who were domestic violence victims, battling serious medical conditions, dealing with business closures or job loss. NAB’s failures likely compounded the already challenging situation for these people.”
Longo also highlighted the rising cost of living pressures, noting an increase in customers seeking relief from their lenders. He stated that ASIC had observed the significant impact on lives and livelihoods when financial institutions fail to adequately support those experiencing hardship.
He emphasised that compliance with financial hardship obligations is a key enforcement priority for ASIC in 2024.
Earlier in the year, the regulator issued a warning to the lending industry following the release of its hardship report. Longo further asserted that ASIC would take decisive action against banks and lenders that fail to meet their obligations.
The regulator is seeking declarations, pecuniary penalties, and adverse publicity orders against NAB and AFSH.
This action follows a similar case brought by ASIC against Westpac in September 2023 over allegations of financial hardship misconduct.
In April this year, NAB completed the divestiture of its New Zealand wealth management businesses to FirstCape.
FirstCape was formed via the consolidation of NAB’s JBWere New Zealand and BNZ Investment Services enterprises, along with Jarden Wealth and Asset Management and Harbour Asset Management.
