Ubank Will Assess Income on Payslips Alone and Take a Broker-Declared Living Expense. The Verification Step on Your File Didn’t Move

Two directions, one fortnight

In the fortnight to 1 October, lenders sitting on the same broker panels moved in opposite directions on the same question: how much evidence belongs on a residential file.

Broker Daily’s lender policy round-up for 25 September to 1 October, published on 2 October, recorded a package of changes at Ubank that collectively reduce the documentation load on an eligible application. According to that round-up, Ubank will now allow eligible applicants to have their income assessed using payslips alone. illion bank statements are no longer compulsory for those applicants, with brokers able to request a bypass through Loanapp Chat. The package also introduces broker-declared living expenses, which the round-up describes as “reducing the need for supporting documentation.” Alongside the credit changes, Ubank has added direct phone lines to its Sydney-based credit team and text alerts before an assessor calls.

These details are drawn from Broker Daily’s round-up. We were not able to locate a corresponding public announcement on Ubank’s own broker channel, so treat the mechanics as reported rather than settled: confirm with your BDM or Ubank’s current credit policy what “eligible” covers and exactly how a broker-declared expense figure is captured in the application flow before you lean on it on a live file.

In the same window, the movement ran the other way elsewhere on the panel. Bankwest now requires a notice of assessment for self-employed full-verification applications and no longer accepts an accountant’s letter as a substitute, effective 29 September. Firstmac widened what counts rather than what must be proven, allowing government benefits, pensions and maintenance income into servicing where they make up no more than 50 per cent of a borrower’s total assessable income, with the lender’s standard evidence and ongoing-income requirements still applying. And in the commercial space, RedZed’s pricing continues to sit behind self-certified income declarations supported by accountant declarations, BAS or business trading statements.

Four lenders, four different answers to what a file has to carry. For a broker writing across all of them in the same week, that is not an abstract policy observation. It is a practical problem about which documents you collect, and on whose authority you stop collecting them.

The change that matters isn’t the payslip

Of the Ubank changes, the payslips-only pathway is the least consequential. Income is the part of a borrower’s position with the strongest documentary trail. A payslip is a primary document, it is issued by a third party, it carries year-to-date figures that can be sense-checked against a contract or a previous assessment, and an experienced broker can usually tell within seconds whether one is internally consistent. Removing a compulsory bank statement from an income assessment that still rests on payslips is a meaningful efficiency gain and a modest evidentiary change.

Living expenses are a different proposition entirely. They are the figure most likely to be wrong, the hardest to evidence from a single document, and — in the enforcement and dispute record of the last decade — the input that has generated the most argument about whether a licensee did enough. A declared expense figure is a forecast dressed as a fact: it asks a borrower to predict what they will spend after settlement, in a household whose costs are moving.

So when a lender moves living expenses from “supported by documentation” to “declared by the broker,” the efficiency is real, and so is the shift in where the thinking has to happen. The document was doing two jobs: it satisfied the lender’s file, and it gave you something to reason from. Removing the first requirement does not remove the second need.

Where the obligation actually sits

ASIC’s Regulatory Guide 209, which sets out the responsible lending framework, is explicit about who it binds. RG 209.3 states the obligations apply “to all credit licensees, including credit providers (i.e. lenders, such as banks, credit unions, small amount lenders and finance companies), lessors under consumer leases and credit assistance providers (e.g. mortgage and finance brokers).”

Credit assistance providers are named in their own right, not as an appendix to the lender’s obligations. And RG 209.43 sets out the requirement in two limbs: “make reasonable inquiries about the consumer’s financial situation; and take reasonable steps to verify the consumer’s financial situation.”

Two limbs. Asking is the first. Verifying is a separate act, and it does not disappear because the party at the other end of the lodgement has decided it does not need the same evidence to price its own risk.

RG 209.47 describes what information can be relied on in an unsuitability assessment: the licensee must have had “reason to believe the information was true, or would have had reason to believe that the information was true if the licensee had made the inquiries or verification that was required.” The test is framed around what the licensee had reason to believe — not around what the lender asked for.

RG 209.50 goes further on the specific question of relying on somebody else’s word:

The same passage carries the line from the Financial Services Royal Commission that has anchored this area ever since: “Verification calls for more than taking the consumer at his or her word.”

Why RG 209.48 describes your role

The paragraph worth pinning above the desk is RG 209.48. It explains why the verification limb exists at all — application information “may not, in all cases, be reliable” because of:

• “overstatement of income or understatement of expenses by the consumer due to a mistake or misunderstanding”;
• “mistake or negligence by a person who is assisting the consumer to make an application”; and
• “deliberate fraud by the consumer or a person who is assisting the consumer to make an application”.

Read the second and third limbs again. Two of the three reasons ASIC gives for requiring verification are about the person assisting the consumer. On a pathway where the broker declares the living expense figure, that person is you.

This is not an accusation and it is not a suggestion that anything about Ubank’s process is improper — a lender is entitled to set its own evidence requirements, and brokers have been entering declared figures into servicing calculators for as long as servicing calculators have existed. The point is narrower and more useful: the guidance anticipates that a figure passing through an intermediary can be wrong, and builds the verification limb partly for that reason. A process that removes the document and leaves the declaration is a process that leans more heavily on the intermediary’s judgement, not less.

The nuance: “reasonable” does scale

It would be wrong to conclude that a document-lite pathway is inherently non-compliant, and brokers should be sceptical of anyone who tells them it is.

RG 209.81 and RG 209.82 are clear that the standard flexes: “what you need to do to meet these obligations in relation to a particular consumer will vary depending on a range of different circumstances relevant to their particular application.” The guidance expressly contemplates circumstances where risks “are more remote and that it may be reasonable to take fewer steps.”

That is a genuine latitude, and it is the latitude a streamlined lender pathway is designed to operate inside. A long-tenured PAYG applicant on a 65 per cent LVR refinance with a reducing limit and years of clean conduct is not the same file as a first-time buyer at 90 per cent with a new job and a declared expense figure that happens to land just under the benchmark.

So the question is never “is this pathway compliant?” It is “were my steps reasonable for this consumer, and does my file show why?” The first half is a judgement. The second half is a file note, and it is the half brokers lose.

Best interests duty sits on top

Even a file that satisfies the responsible lending limbs has a second obligation stacked above it, and ASIC’s guidance on the best interests duty is unusually direct about the relationship between the two.

RG 273.105 states the best interests obligations “apply in addition to other laws — such as the responsible lending obligations.” RG 273.107 adds that “the obligations are separate, and compliance with one of these obligations does not necessarily mean the other has been satisfied.” RG 273.110 puts it plainly: “There are situations where you might satisfy the responsible lending obligations but fall short of complying with the best interests duty.”

RG 273.109 explains why the duty reaches further — it “applies more broadly to the credit assistance you provide, which extends to your conduct and processes as well as the appropriateness of the credit product.”

Your conduct and your processes. A faster pathway is a process choice. If the reason a particular lender was recommended is that its evidence requirements were the lightest, rather than that its product was the best available fit for the client, the speed is not a defence — it is the problem. And RG 273.40 is the counterweight brokers should hold onto on these files: “If it is reasonably apparent that the information about a consumer’s individual circumstances is incomplete or inaccurate, you should make further inquiries.”

Why the rate backdrop raises the stakes

On 29 September the Reserve Bank lifted the cash rate target by 25 basis points to 4.60 per cent. The Board’s statement said “[i]nflation remains elevated and some of the upside risks flagged in August are materialising,” noted that “[h]igher fuel prices have partially been passed through to prices of other goods and services,” and left the door open explicitly: “The Board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed.”

This matters for the documentation question in a specific way. The files where a declared expense figure is most likely to be understated are the files closest to the servicing line — because that is where the pressure to arrive at a workable number is greatest, and where a household’s actual costs are rising fastest against the figure in the calculator. A thin expense input is cheapest to use on exactly the applications where it is most expensive to get wrong.

It also matters in a slower way. A file written today on a declared figure will be read, if it is ever read, two or three years from now, by someone looking at an arrears or hardship outcome with the benefit of hindsight and a higher rate. The file note is the only part of today that survives into that conversation.

Your panel is no longer uniform

The operational problem running underneath all of this is that evidence requirements have stopped being a panel-wide standard and become a per-lender variable that moves week to week.

In one fortnight: one lender dropped a compulsory third-party statement, another removed an accepted substitute document for self-employed income, a third expanded the income types it will count while holding its evidence rules steady, and a fourth continued to price off self-certification with specified supporting material. A broker who maintains one internal document checklist across the whole panel is now, by definition, either over-collecting on some lenders or under-collecting on others.

Over-collecting is an efficiency cost. Under-collecting is a compliance one. Neither is solved by memory, and both are solved by the same thing: a short, dated, per-lender evidence matrix that someone in the business owns and updates when the round-ups land.

What to review this week

A practical sequence you can run in under an hour:

1. Confirm the mechanics with the lender, not the round-up. Ask your Ubank BDM in writing what “eligible applicant” covers for the payslips-only pathway, how the broker-declared living expense is captured, and whether the lender expects you to retain supporting material even where it does not require it to be submitted. Keep the reply.
2. Separate “not required to lodge” from “not required to hold.” These are different things and lenders do not always distinguish them clearly. Your retention position should be set by your own licensee’s policy, not by the lodgement requirement.
3. Write the per-lender evidence matrix. One row per active lender, columns for PAYG income evidence, self-employed income evidence, living expense treatment, and the date you last confirmed it. Four lenders changed inside a fortnight; an undated matrix is a liability.
4. Set a file-note standard for declared figures. Where you use a declared expense number, the note should record what you asked, what the client said, what you compared it against, and why you were satisfied the figure was reasonable for that household. Two or three sentences, written at the time.
5. Define your own escalation triggers. Decide in advance which circumstances take a file off the light pathway regardless of lender eligibility — high LVR, recent employment change, a declared figure sitting conspicuously close to a benchmark, dependants not reflected in the expenses, or anything the client said that sat oddly. RG 273.40 asks you to make further inquiries where information is apparently incomplete or inaccurate; a written trigger list is how that becomes a process rather than a reflex.
6. Take it to your licensee. Your aggregator or licensee may already have a position on document-lite pathways. If they do, adopt it. If they do not, ask — and note the date you asked.