Lender seeks to debunk non-bank ‘myths’

The chief lending officer of a credit provider has sought to refute the “myths” associated with non-bank lending amid concerns raised by financial regulators.

Speaking to Mortgage Business’ sister publication, The Adviser for its livestream webcast, chief lending officer of La Trobe Financial Cory Bannister sought to “debunk” what he has perceived as “myths” regarding the rise of non-bank lending.

Over the past few months, financial regulators have raised concerns over the rise of non-bank market share, with the Reserve Bank of Australia (RBA) warning that continued growth in loans issued by non-banks could pose “financial stability risks”.

The Council of Financial Regulators (CFR) has also noted the rise of non-banks in its latest quarterly statement, claiming there is evidence that housing credit through the channel is “growing significantly” in comparison to credit issuance through established banks, particularly for the purpose of property development.

The CFR also noted that its members have “supported efforts to expand the coverage of data on non-ADI lenders” through new data collection powers recently granted to the Australian Prudential Regulation Authority (APRA).

However, Mr Bannister has expressed concern regarding the portrayal of non-banks, particularly by the mainstream press, as unregulated “shadow banks”.

The La Trobe Financial executive stressed that non-banks were subject to the same regulatory guidelines as established banks.

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Source: Lender seeks to debunk non-bank ‘myths’ – Mortgage Business