No‑doc loans fuel shadow lending

Loans that require little or no income verification concentrate risk outside regulated banking channels: borrowers who can’t document income (self‑employed, seasonal workers, new immigrants) get higher‑cost, short‑term credit from private lenders that evade consumer checks and protections. Central banks and inquiries (Reserve Bank of Australia; parliamentary hearings) show these products are a small but high‑risk slice of assets and were widespread before the 2008 crisis. — If no‑doc lending persists or reappears, it shifts housing and credit risk into opaque private markets and undermines consumer protections and financial stability.