BOQ's mortgage approval process did not meet responsible lending obligations

Bank of Queensland has changed the way it assesses home loan applications after the Australian Securities and Investments Commission raised concerns about its practices.

ASIC did not like the fact the BOQ was using a benchmark, the Henderson Poverty Index, to estimate the living expenses of consumers applying for home loans, rather than seeking information about actual expenses.

ASIC said in a statement that the bank's reliance on the benchmark alone was not consistent with the responsible lending obligations of the National Consumer Credit Protection Act.

ASIC said BOQ had changed its home loan application forms to obtain more information about an applicant's living expenses.

The bank has committed to reviewing the circumstances of borrowers who go into hardship to make sure they have not been disadvantaged by a loan approved under the old system.