National Australia Bank has admitted to breaching credit legislation 255 times over its axed introducer program for mortgages.
NAB has filed documents in the Federal Court admitting to 255 of the 295 breaches of the Consumer Credit Protection Act alleged by ASIC.
ASIC launched legal action against the bank back in August this year alleging it broke credit laws in relation to 297 loans written after referrals from unlicensed introducers.
ASIC claimed its investigation uncovered that NAB bankers overstepped the 'spot and refer' requirement by accepting information and documentation from unlicensed introducers, including completed home loan applications, payslips, copies of customer identification documents and more.
ASIC said the program was allegedly exploited by a bribery ring, in which bankers sold loans that were based on fake documents.
The bank acknowledged its customers were exposed to risk of taking out unsuitable loans as a result of its conduct.
Under the law, the maximum penalty for each individual breach is between $1.7 million to $1.8 million, adding up to close to $500 million combined.
During the Royal Commission NAB identified that misconduct stemming from the program went undetected until 2015 due to there being no lead, with a general manager only being appointed in October 2016, a lack of systems to monitor or review introducers, and controls over the program heavily relying on bankers.
From 2013 to 2016 the program generated around $24 billion worth of loans.
The proceedings related to the conduct of 16 bankers accepting loan information and documentation from 25 unlicensed introducers.