Nelson Building Society

The High Court has made declaratory orders that Nelson Building Society breached s 9C(1), by failing to comply with the responsible lending principles; and breached s 18 of the Credit Contracts and Consumer Finance Act 2003. NBS was ordered to pay a pecuniary penalty of $825,500. NBS consented to the Commission seeking the orders following a settlement between the parties prior to the proceedings being filed.

NBS admitted that it failed to have adequate systems and processes in place to comply with the Lender Responsibility Principles in relation to charging interest on consumer loan products, continuing disclosure and changes to loans. It also admitted that it did not conduct proper affordability assessments for 37 borrowers, so that loans were approved without reasonable enquiries into borrowers’ ability to repay without substantial hardship; and failed to provide continuing disclosure to certain borrowers in circumstances where it was required.