A big four bank has announced that its “broker interview guide”, designed as part of its commitment to responsible lending obligations, has taken effect for new loan applications.
NAB’s broker interview guide (BIG), designed to deliver “good customer outcomes” for brokers and customers, has taken effect for loan applications submitted after Wednesday, 21 November.
NAB has said that the BIG is an upfront document that “must be completed, signed and submitted with all new NCCP regulated home loan applications”, where the purpose of funds is for personal, personal household and residential investment home loans.
However, the bank noted that the BIG is not required for non-NCCP loan applications, which may include the purchasing of shares and lending in a company’s name, and for variations that do not require a credit assessment.
NAB added that responses provided in the BIG will be used as part of the bank’s assessment of the loan application and will be valid for a period of 90 days.
“The BIG is part of industry-wide change to ensure good outcomes are delivered to your customers in a simple, streamlined and supported way,” NAB said.
The major bank claimed that the BIG would provide the lender with an understanding of why the specific product, loan amount, repayment preference and loan structure were selected by a customer and shows “clear alignment with the customer’s requirements and objectives”.
“It also ensures we have a standardised process to better support customer outcomes, aligning with the Combined Industry Forum (CIF) to bring our industry to a higher standard, together,” the bank continued.
The BIG, which has been developed alongside other major lenders, details key elements of a broker’s conversations with customers that can be referred to in order to understand the customer’s situation and provide reasoning for the solutions that have been offered.
NAB has also stated that the BIG document will be made available via the “compliance tab” on aggregator software and via nabbroker.com.au.
Following regulatory scrutiny of how borrower expenses are assessed and verified, the major banks released The Broker Interview Guide for Regulated Lending Secured by Residential Property in April 2018 for use by brokers when undertaking needs analysis and before introducing loans to the major banks.
The guide reportedly aims to “clarify the minimum level of inquiries participating lenders require brokers to make on their behalf” and provide a means to record the result of the inquiries made for the lender to review.