Living Expenses Working Group
Work has continued throughout 2019, culminating in a proposal in August, details available here.
To support the evolving requirements of the industry, in November 2018 LIXI published a paper inviting input to shape the changes to the LIXI data standards.
Recent industry changes required us to revisit the standardised categories which were updated in 2016:
- Some lenders have varied the categories used when collecting customer declared living expenses, which is detrimental to the customer and broker experience.
- The recent Royal Commission has questioned whether the use of the Household Expenditure Measure (HEM) constitutes an adequate verification of a borrower’s expenditure. Australia's major lenders continue to support the use of HEM as an important component of their expense verification and credit assessment process.
- The methodology behind the calculation of HEM has changed, and the categories of data now no longer correspond with the LIXI categories on a like-for-like basis.
- Data aggregation services offer automated capture of account transaction data that can populate or verify income and expense data at a more granular level than ever before.
More information is available here.
In response to the publication by ASIC of REP 445 in August 2015, and REP 493 in September 2016, the Living Expenses Working Group formed in November 2015. The aim was to standardise the data collection to meet the requirements of ASIC and to improve the process for brokers and customers.
Through a series of meetings the working group collaboratively developed a set of requirements around;
- Declared living expenses
- Interest only loan reasons
- Broker declarations regarding borrower requirements and objectives and product suitability
A summary of these requirements can be found here, but for full detail view the Issue Tickets and associated discussion in LIXILab.
A number of iterations of draft LIXI 2 standards that accommodate these requirements were released for comment with a final version of the LIXI Credit Application for Australia Standard being published on 13th December 2016 (LIXI Credit Application for Australia (CAL 2.6.0) Standard).
Further information on LIXI 1 changes are available here: Proposed LIXI 1 Solutions to the Living Expense Working Group Requirements.
Broad support for this initiative included involvement from: Advantedge, AFG, ANZ, Adelaide & Bendigo Bank, Aussie Home Loans, CBA, Connective, Credit Union Australia, ING Direct, Gadens, LTX, Macquarie Bank, MFAA, Mortgage Choice, NAB, P&N Bank, Pepper, Sandstone, Simpology, St George, Suncorp and Westpac.
Updated: 2nd September 2019