Loan book closed to new applications in August 2024 following allegations of compliance failings
ASX-listed non-bank lender Pepper Money has confirmed it is in negotiations to acquire the RAMS home loan portfolio off Westpac in conjunction with a consortium of buyers.
“The negotiations are preliminary and incomplete, and no agreement has been reached in relation to the proposal. There is no certainty that agreement will be reached or that the transaction will eventuate,” said Pepper Money in a regulatory statement.
Westpac closed the RAMS portfolio to new applications in August 2024 in response to allegations of compliance failings made by the Australian Securities and Exchange Commission (ASIC).
Westpac was slapped with a $20 million fine by the Federal Court earlier this month after determining that RAMS breached the Credit Act by engaging with unlicensed referrers, lacking sufficient arrangements to manage conflicts of interest, failing to properly supervise its representatives, and not ensuring that its credit activities were conducted efficiently, honestly and fairly.
RAMS, a wholly owned subsidiary of Westpac Banking Corporation, operated as a standalone entity within the Westpac Group through a franchise network. It provided credit services for RAMS-branded home loans, primarily targeting first-home buyers and self-employed borrowers.
While Westpac initiated the winding down of the RAMS business last year, it continues to support existing customers holding RAMS-branded home loans.
The RAMS loan book was valued at $31.8 billion as of August 2024.
