ASIC's well-timed publication of its deep dive into the mortgage books of 16 major bank and non-bank home lenders gave the House of Representatives economics committee plenty to throw at the Westpac and ANZ chief executives and their c-suite colleagues.First-up was Brian Hartzer, Westpac's chief executive, supported by Peter King, group chief financial officer. In the course of the introductory comments, Hartzer observed: "APRA has set higher capital requirements for banks to be seen as 'unquestionably strong'. "More recently, APRA has intervened to limit the growth in investor property and interest only mortgage lending."The combination of these changes has meant that a key driver of our pricing decisions in the last six months has been to meet APRA's balance sheet requirements, rather than to respond to changes in cost of funds or market share."As an example, we have increased pricing on interest-only mortgages, while at the same time offering lower rates for principal-and-interest mortgages. This encourages borrowers to move from interest-only to principal-and-interest payments, at a time when interest rates are at 50-year lows. And in recent months we have seen high volumes of customers making the switch."This gave the committee the path in to take the first swipe at Westpac, ahead of a deeper investigation by the ACCC.Committee Chair David Coleman asserted Westpac has 50 per cent of its mortgage book held as interest-only loans. Coleman's back of the envelope estimate is that Westpac has 800,000 interest-only home loans. Hartzer was unable to confirm if this was the highest proportion of any bank in Australia. He also said that, even if it were true, it was not a problem: "This not a credit [risk] issue, it's a macro-economic issue to ensure that banks and their customers have enough resilience in the event that interest rates rise."He added that one option to get to the 30 per cent mark mandated by APRA is to simply stop lending. Hartzer said a better way to achieve this was to send a "pricing signal" to new and existing customers by increasing interest rates.Hartzer denied that the primary driver of raising rates was done to improve the profitability of the bank, but to strengthen its balance sheet, while still leaving customers more choice. He said that Westpac has encouraged its customers to switch to principal and interest loans.Coleman than read out several investment bank analysts' reports - Macquarie bank and JP Morgan among that that all chorused how Westpac's move would increase its profitability, and would increase its NIM by 11 basis points on one estimate. Hartzer countered that about 70 per cent of exiting interest-only borrowers have taken up the offer to switch.He also denied that compliance has become a profit centre at Westpac. "This year, compliance will cost us between $300 - $400 million a year, which we will not be recovering [from Westpac's customers]," he said.Another pointed question: When ACCC goes through Westpac's books, will they see any profitability analysis was made prior to raising the rates on interest-only loans?Hartzer said