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• MPA Online

SEQUAL CEO Kevin Conlon has reiterated his position that the Federal Government regulations of the reverse mortgage market are nothing more than a health check of the industry.

“Some months ago, I predicted that the regulatory review being conducted by Treasury was a health check of the industry,” Conlon says. “I’m confident this is the case.”

“Reverse mortgages are not offered in Australia without a no negative equity guarantee,” Conlon adds. “All SEQUAL members are obliged to provide a no negative equity guarantee, and we welcome the decision to reinforce this fundamental consumer protection through a statutory obligation.”

Conlon has gone on to defend the industry against its critics, citing its historical standards of practice. According to Conlon, of the 42,000 reverse mortgages currently on issue, the Financial Ombudsman has only dealt with four complaints.

“Name another industry that has a track record like that. Four out of 42,000. And three were found in favour of the lenders,” he says.

Though Conlon does not believe the Federal Government regulations set to come into effect in the new year will contain any surprises for the industry, he has offered an admonition to those considering the regulatory action.

“The regulatory review has been viewing three broad areas: Disclosure, financial literacy and product design,” he says. “I think it is entirely the business of regulators to look at the first two. Beyond the statutory protection that is being considered for no negative equity guarantees, I do not believe regulators have a role to play in product design.”

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