Aussie Home Loans did not have "a formal … responsible lending policy" until a couple of weeks ago. AHL's chief financial officer Giles Boddy, confirmed an account of slipshod compliance culture, frequent fraud and a dash to clean up the broking business' act - or surrender its reputation - while giving evidence to the Royal Commission into banking misconduct on Friday.Aussie Home Loans, an iconic brand founded more than 20 years ago by John Symond, in recent years has become a wholly owned subsidiary of Commonwealth Bank.Eloise Dias, counsel assisting, took Boddy through a sequence of "risk and control self-assessments" and related audit reports. These included reviews that the Aussie Home Loans CFO said "have been rolled out across the business throughout 2016 and 2017," with one critical update in place only this month.One of these assessments included the heading: "Some key responsible lending requirements have not been met." An audit report finalised in December 2017 stated that "20 obligations are not always met."Dias read to Boddy the detail that "for 13 out of 20 files tested, the broker had not retained evidence to support that reasonable steps had been taken to verify the customer's financial situation."She continued: "AHL do not have a policy or guideline that defines minimum expectation from a broker to verify customer information for a home loan application. This includes verification of income, liabilities, account history, savings and gifts."In all, Dias said, for loan files "sample tested, the brokers did not capture enough supporting documentation to substantiate that reasonable steps were taken to confirm the product was not unsuitable …. For example, a customer needs analysis was not completed or signed by the customer."Dias read out more startling internal admissions."Risk management activities and capabilities are not sufficient to provide sufficient cover over AHL business processes. Whilst AHL has invested in riskmanagement capabilities since our last audit, this has not been in keeping with the increase in regulator and community expectations."Boddy told the commissioner, Kenneth Hayne, that until recently "we had training requirements, contractual arrangements … to comply with NCCP and the responsible lending Act. But we didn't have a formal document."A more recent CBA audit committee report from early February 2018 stated that Aussie systems "allow multiple users, including brokers, to make direct changes to applications without detection, increasing the risk that a loan could be manipulated at a later stage to obtain funding approval. "We further found loan applications where contact details were either the broker's mobile phone number (464 loans) or email address (1645 loans), instead of the customer's number, further increasing the potential for fraud." The CBA authors of the audit report stated that "CBA has had executives involved in AHL as directors in recent years and has gradually been placing senior lenders in the business to achieve greater alignment with the bank's practices. "However, in our view, this requires further enhancement to ensure consistency of governance and leadership with respect to risk and controls. In short, AHL's risk culture needs to lift."Significant