Australia's securities regulator is taking National Australia Bank Ltd. to court over the bank's so-called "introducer" scheme, and is seeking a potential fine of over A$500 million against the bank.
The Australian Securities and Investments Commission said the bank accepted information and documents in support of consumer loan applications from third-party introducers who are not licensed to engage in credit activity. The alleged violations happened between Sept. 3, 2013, and July 19, 2016, and relate to the conduct of 16 bankers accepting loan information and documentation from 25 unlicensed introducers in relation to 297 loans.
ASIC said the actions breached the National Consumer Credit Protection Act, which prohibits credit licensees from engaging in credit activity without an Australian credit license, and is asking the court to impose a civil penalty on the bank. The maximum penalty for one breach of the act was 10,000 penalty units, or A$1.7 million to A$1.8 million, leading to a potential maximum fine of A$535 million.
NAB said in an Aug. 23 release that it is carefully assessing the allegations. The bank has announced in March that it is ending the referral payments to introducers.
