News: WBC UPDATE 1-Australia regulator sues NAB, first lawsuit resulting from bank inquiry

(Recasts with milestone, adds quotes from court filing, ASIC spokesman)

An Australian regulator filed a lawsuit on Friday against No. 3 lender National Australia Bank Ltd (NAB) accusing it of taking loan applications from unlicensed "introducers", the first lawsuit stemming directly from a finance sector inquiry.

The Australian Securities and Investments Commission (ASIC) said NAB had breached a law which prevents banks from dealing with unlicensed loan professionals in relation to 297 loans between September 2013 and July 2016.

"This conduct exposed the customers and NAB to the risk of wrongful conduct by the introducer, including possible fraud," ASIC said in a court filing published on its website.

"It also exposed customers to a risk that loans would be advanced to them that were unsuitable."

Introducer programs, where banks pay bonuses to third parties for sending potential customers to them for loans, were among many practices scrutinised at a powerful Royal Commission inquiry which accused the industry of acting in a way that put short-term profit ahead of customer needs.

At the inquiry, NAB disclosed that, as part of its introducer scheme, some employees had accepted over-the-counter cash bribes to facilitate loans based on fake documents.

Although ASIC, the regulator, has brought lawsuits against lenders in relation to issues that were discussed at the inquiry, the action against NAB was the first sparked by allegations made during hearings, an ASIC spokesman told Reuters.

A NAB spokeswoman had no immediate comment when Reuters asked for a response.

ASIC said in the court filing that it was seeking unspecified fines and a formal finding of wrongdoing, as well as an order that the bank pay its court costs.