Big four bank ANZ has faced questioning over the failure of its bankers and third party mortgage brokers to accurately assess its customers’ expenditure when applying for home loans.

In the second week of hearings, the banking royal commission heard that ANZ had under reported the monthly expenditure of a pensioner applying for a home loan by a whopping $1800 a month.

The man concerned, Robert Regan, detailed the bank’s action in a witness statement. His information was given to the bank in an application made by a mortgage broker.

The commission heard that, had the bank examined his bank statements, the true picture would have been evident.

Counsel assisting Rowena Orr, QC, commented to ANZ executive William Ranken: “I just want to make sure that your evidence is that when you have a statement of financial position submitted by a broker, that contains information about a customer’s expenses and you have your own information such as bank statements that is inconsistent with that, you ignore your own information.”

Mr Ranked confirmed the bank does not “necessarily” check inconsistencies. His explanation was that it would be difficult to do so.

Ms Orr later said: “I want to put it to you that you processes [about expense identification] are non-compliant with the National Credit Act.”

Mr Ranken told the commission that ANZ sold 58 per cent of home loans through brokers.

In these cases the brokers interview clients and submit financial information. Where monthly expenses fall below a formula worked out from Australian Bureau of Statistics information the bank ups estimates to that level.

Commissioner Kenneth Hayne questioned that practice, asking Mr Ranken: “Why is it in the broker’s interest … to interrogate the expense figures provided by the client?”

Mr Ranken replied that not to do so would breach brokers licence conditions.

The morning’s hearings followed a stream of revelations last week concerning NAB and the Commonwealth Bank of Australia, relating to credit cards, home loans, so-called ‘introducers’, mortgage brokers’ commissions, and the forgery of documents.

The current round of hearings will end on Friday. The Commissioner is due to hand down an interim report in September, and a final report in February next year.