CBA Tightens Lending Rules for Companies and Trusts
Hey everyone, let’s talk about a recent update from the Commonwealth Bank of Australia, or CBA, that’s catching the attention of property investors and brokers alike. From Saturday, 22 November, CBA has officially adjusted its lending policies for companies and trusts. This is a significant move because these structures are commonly used by investors to improve loan serviceability and access larger home loans, but there have been growing concerns around unlicensed advice promoting them as a way to bypass lending limits.
So, what exactly is changing? Well, under the new rules, anyone applying for a loan through a company or trust – or their servicing guarantor – must have had an existing lending facility with CBA for at least six months. This is meant to ensure that only established borrowers can access these types of loans, helping the bank maintain responsible lending practices while still supporting investors who use these structures legitimately.
Also Read:- Trump Sparks Controversy Over Democrats and Epstein Fallout
- Chaos at Euston as Staffordshire Signalling Fault Halts Trains
Baber Zaka, CBA’s general manager of third-party banking, emphasized that the bank regularly reviews and updates its policies to reflect market conditions. He pointed out that brokers play a vital role in helping Australians achieve their home ownership goals, and these adjustments are designed to support brokers while keeping lending responsible and prudent.
The timing of this change is notable because it comes shortly after Macquarie Bank decided to pause all new lending to companies and trusts at the end of October. That move was largely in response to the rapid rise of strategies being promoted online that aim to maximize borrowing through these structures, often in ways that could skirt regulatory safeguards. Industry voices, like PICA chair Ben Kingsley, have warned that widespread promotion of company and trust lending to inexperienced investors could lead to financial harm, and potentially, regulatory scrutiny.
It’s worth noting that while these structures still have a legitimate role for seasoned investors, the risks are rising when advice is unlicensed or when borrowers are pushed toward aggressive borrowing strategies. The adjustment by CBA reflects a broader trend in the industry: lenders are becoming more cautious and ensuring that the rules balance opportunity with prudence.
So, for brokers and investors, the key takeaway is clear: if you’re applying through a company or trust, make sure your relationship with CBA is established and solid, because the bank is tightening the gate to protect both customers and the financial system.
This policy tweak might seem small, but it signals how seriously banks are starting to take lending risks in the property market, especially with more complex structures like trusts and companies. The message is simple: responsible lending comes first, and the days of pushing the limits without a track record are being curtailed.
Read More:
0 Comments