SYDNEY, April 3 (Reuters) - Australia’s corporate watchdog on Monday said it was launching a new round of industry surveillance to ensure banks and brokers were not recommending overly expensive interest-only loans to customers.
The move by the Australian Securities and Investments Commission follows steps announced last week by the banking watchdog, the Australian Prudential Regulation Authority, to tighten rules on interest-only loans.
“ASIC will shortly commence a surveillance to identify lenders and mortgage brokers who are recommending high numbers of more expensive interest-only loans,” ASIC said.
The regulator also said that eight major lenders will provide remediation to consumers who suffer financial difficulty as a result of shortcomings in past lending practices. (Reporting by Wayne Cole; Editing by Richard Pullin)