SYDNEY, March 27 (Reuters) - Two of Australia's biggest banks...

SYDNEY, March 27 (Reuters) - Two of Australia's biggest banks said on Wednesday a crackdown on consumer credit checks was affecting their ability to write new home loans even though approval rates were unchanged, a sign the tougher regulatory environment is squeezing the economy.

The CEOs of No. 3 lender Australia and New Zealand Banking Group Ltd (ANZ) and No. 4 lender National Australia Bank Ltd (NAB) gave the downbeat assessment as they fronted parliament for the first time since an inquiry last year rounded on the industry for overly aggressive loan sales.

A heightened focus on checking the spending habits of potential borrowers was slowing loan approvals and discouraging applications, NAB interim CEO Philip Chronican and chief financial officer Gary Lennon said separately.

"Most borrowers who previously would have qualified for a home loan continue to qualify for a home loan," Chronican told a hearing of parliament's house of representatives economics committee.

But potential borrowers needed to verify up to 13 claims about their spending, and "as a result we are lending less in home lending than we might otherwise be able to", he added.

Lennon said that although the home loan application success rate had not changed from a year earlier, application numbers were down "potentially as (a result of) the difficulty getting all the information together".

Economists have also blamed poor consumer sentiment as a result of falling house prices, and uncertainty about an imminent federal election for a cooling mortgage industry.

The Australian economy slowed sharply in the December quarter and many economists expect the Reserve Bank of Australia to cut rates by August.

Though consumer credit checks became mandatory in Australia in 2012, a year-long public inquiry aired accusations of overly aggressive loan sales by the country's major banks including NAB.

This week NAB ended a scheme of paying members of the public bonuses for referring mortgage sales. In parliament on Wednesday, Chronican said the bank made the decision after it was embarrassed by criticism of the scheme at the government-backed inquiry.

ANZ CEO Shayne Elliott said tougher application of lending standards meant some borrowers would find it harder to borrow.

The CEOs of Australia's "Big Four" banks must face regular hearings in parliament. Chronican became NAB's interim CEO after the former CEO and former chairman left the roles due to criticism in the inquiry's final report last month.

Chronican will become the bank's chairman once the company hires a permanent CEO.