Westpac wins legal action after Asic accused it of 250,000 irresponsible lending cases

Regulator had accused bank of not working out whether customers could afford loans

The corporate regulator has lost legal action it brought against Westpac accusing the bank of lending irresponsibly more than 250,000 times by using a controversial benchmark to decide whether to make home loans instead of working out whether each customer could afford to repay the money.

The federal court judge Nye Perram, who forced the case to go to trial by rejecting a $35m settlement deal between the Australian Securities and Investments Commission and Westpac, dismissed the regulator's case on Tuesday.