ASIC Launches New Review of Australian Lending Practices — What Mortgage Brokers and Non-Bank Borrowers Need to Know

Key takeaway: ASIC has initiated a new review of Australian lending practices, with industry bodies including the MFAA and FBAA welcoming the scrutiny while cautioning strongly against excessive regulation of mortgage and finance brokers — a distinction that matters for borrowers who rely on broker channels to access non-bank lenders.

What Is ASIC Reviewing?

Australia's corporate regulator, ASIC, has launched a fresh review of lending practices across the mortgage and finance sector. The review focuses on how lenders and brokers assess borrower suitability and whether current responsible lending standards are being consistently met.

The announcement comes as non-bank and private credit lending activity continues to grow, driven by borrowers unable to meet the increasingly stringent serviceability requirements of Australia's major banks.

Industry Response: Welcome, But With Conditions

The Mortgage & Finance Association of Australia (MFAA) and the Finance Brokers Association of Australia (FBAA) have both responded to the review announcement. Both bodies broadly welcomed regulatory oversight as a marker of industry professionalism, while issuing clear warnings against unduly burdening brokers with additional compliance requirements.

"Industry bodies have welcomed ASIC's new review of lending practices, while urging the regulator against excessively regulating mortgage and finance brokers."

— The Adviser, 30 September 2026

The concern reflects a broader industry tension: investor and borrower protection matters, but excessive regulation of the broker channel can reduce competition and limit access to finance for borrowers outside traditional bank credit profiles.

Why Non-Bank Borrowers Should Pay Attention

Mortgage brokers are the primary channel through which many Australians — especially self-employed borrowers, new migrants, and those with complex income structures — access non-bank lenders. Any regulatory tightening that increases compliance costs or reduces broker flexibility could make it harder for these borrowers to find suitable finance.

For self-employed Australians relying on Alt Doc (alternative documentation) loans, the broker relationship is particularly important. Rather than payslips, Alt Doc borrowers submit BAS statements, accountant letters, or bank statements — a process that requires brokers experienced in handling non-standard documentation.

ASIC reviews of this scope typically take 12 to 18 months and focus on systemic practices rather than individual transactions. Borrowers pursuing finance now are unlikely to see immediate changes to application processes.

What This Means for MPFG Borrowers

All lending through MPFG Capital (ACL 553698) already adheres to responsible lending standards, and MPFG's broker network is MFAA and FBAA accredited. The company monitors regulatory developments closely and will update its processes in line with any new guidance.

For borrowers wondering what documentation is required under current standards, the MPFG product range outlines Alt Doc, commercial, and bridging loan requirements — all aligned with existing ASIC guidelines.

FAQ

What is ASIC's 2026 lending practices review examining?

ASIC is examining how lenders and mortgage brokers across Australia are assessing borrower suitability and applying responsible lending standards. The review targets systemic practices in mortgage and consumer finance, particularly whether brokers are acting in clients' best interests under current rules.

Will ASIC's new review change mortgage broker requirements in Australia?

It is too early to confirm. Reviews of this type generally conclude with updated guidance or regulatory reform proposals, which typically take effect 12 to 18 months after the review begins. Industry bodies are actively lobbying to ensure any changes do not unnecessarily restrict broker competition.

How can I access non-bank loan options if broker regulation becomes stricter?

Choosing an established non-bank lender with accredited broker relationships — like MPFG Capital — is the most secure path. MPFG works exclusively through brokers meeting MFAA and FBAA standards, ensuring compliance regardless of any future regulatory changes.

This article is general information only and does not constitute financial or credit advice. All applications are subject to credit assessment by MPFG Capital (ACL 553698).