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Bank threatens brokers, strips accreditation

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Miklos Bolza | 23 Feb 2017, 08:25 AM Agree 0
A note sent by a big four bank has said loan applications from certain brokers will no longer be accepted, effective immediately
  • OzBoy | 23 Feb 2017, 09:01 AM Agree 1
    As a broker if you were under any doubt whatsoever where you fit with CBA then you should have the message well and truly by now.
  • Al 1 | 23 Feb 2017, 09:06 AM Agree 1
    As brokers, are we not charged with finding solutions for clients which are not unsuitable? Not every broker turns over $2 million in volume per month, and even if they do, their clients' profiles may not be a suitable fit for CBA. This is especially pertinent given that they refuse to price competitively any more and that they have pulled out of standalone investment property refinancing. CBA may not see much impact from this ridiculous course of action in the short term, but mark my words, in 24 to 36 months, they will be wondering why their market share has all but evaporated.
  • Clarke Kent | 23 Feb 2017, 09:06 AM Agree 0
    But this was the same Bank that pushed out assessment timeframes 15 days & beyond - how could one seriously consider using them?
  • Country Brokers | 23 Feb 2017, 09:13 AM Agree 1
    They have done this before with the same reasons, Really CBA are you serious , your rates are OFF the mark maybe you need to look internally first, The second tier lenders must be overjoyed.
  • Ronald | 23 Feb 2017, 09:29 AM Agree 1
    Broker's source loans that are not unsuitable for their clients, loan that fit to the individual clients need for future growth, if the CBA can't provide this at competitive rates it is their loss, but instead of canceling accreditation why not put those broker's through an accreditation refresher to make sure they are up to speed with CBA policy.
  • Disgusted | 23 Feb 2017, 09:37 AM Agree 2
    ASIC should be taking a long hard look at this sort of behaviour. This is exactly what we do not want to see in our industry, heavy handed tactics from the lenders imposing conditions on being accredited with them. Write x amount with us or else...
  • SunnyCoastBroker | 23 Feb 2017, 09:41 AM Agree 0
    I read recently that CBA's percentage of broker loans has reduced in comparison to first party loans. Brokers were always going to be the second cousin for CBA. I worked for them for many years, and I recall back in the mid 90's when broking was just starting to get some traction, a comment from some senior exec that "CBA will never deal with brokers", so they were dragged kicking and screaming to the broker table anyway. There are plenty of better options...
    • SunnyCoastBroker | 23 Feb 2017, 02:24 PM Agree 1
      Here's a thought..why don't all the brokers who rarely use CBA, pre-empt the dismissal letter, and ask their aggregators to cancel their accreditation as a pro-active measure?
  • Mark Grange - Brilliant Home Loans | 23 Feb 2017, 09:47 AM Agree 2
    The best way for CBA to force brokers to write more business would be to provide more competitive product and improve service.
    I allowed my CBA accreditation to lapse after they brought in minimum quotas years ago, the affect to my business? Zero.
  • Marty | 23 Feb 2017, 09:49 AM Agree 1
    These are the real issues. Not Commission Reviews. What an appalling puppet on a string approach. If the banks catch on how to effectively service people and their own staff they would triple their profits. So out of touch!
  • arrogant | 23 Feb 2017, 09:49 AM Agree 1
    How can it be in the Best Interest of a client to have a bank not allow accredited brokers to lodge an application. This must call into question the whole mortgage broking business model and must border on third line enforcement by the CBA. Use our product or else. Where is ASIC when you need them. Just another disgusting act from a big bank and I am not a mortgage broker just an outsider.
  • NJ | 23 Feb 2017, 09:53 AM Agree 0
    improve your service & offering if you want business. complete lack of BDM support and resolution of issues
    • SunnyCoastBroker | 23 Feb 2017, 10:24 AM Agree 0
      Does CBA have BDM's?
  • Chris Szigeti | 23 Feb 2017, 10:41 AM Agree 0
    Poor form to say the least - they have never been a brokers friend - I have not had an accreditation with them for over 20 years - older brokers would remember when they put fully page adds in papers saying "dont go to a broker but come to them direct " lost me then and no reason to use them now - clearly not in touch and will receive a lot of flak over this - should reverse their decision - !!
  • Broker | 23 Feb 2017, 11:05 AM Agree 0
    Shame, CBA shame..
  • Gerard R | 23 Feb 2017, 11:19 AM Agree 0
    Have not written a CBA loan for many years, because of rate and lack of service for brokers and clients. Can't wait for the letter.
  • K Perth | 23 Feb 2017, 11:28 AM Agree 0
    This is not new some years ago they were charging brokers $500 to be re accredited
  • JM | 23 Feb 2017, 11:38 AM Agree 0
    I agree with everyone's comments! Hence I won't repeat it.
    If the reason for withdrawing an accreditation is because of the belief that you would lose your product and policy knowledge from a lack of use, then offer a refresher course.
    An online course such as the one they have for commercial accreditation. It's not long, but has more than enough info to brush up on your knowledge base.
  • Stephen Dinte | 23 Feb 2017, 11:48 AM Agree 1
    People, you have missed one vital point.
    If you now speak to a potential client who was put into a CBA loan by a broker you can ask them if they know whether this was due to CBA offering the most suitable loan for their situation, or if it was a case that the broker was merely needing to meet the CBA quota in order to maintain accreditation??
    Like so many others I also cancelled my CBA accreditation a heap of years ago and in all the time since I simply explain that I don't use CBA because to do so would violate my ethics.
  • Lender | 23 Feb 2017, 11:51 AM Agree 0
    Never been a fan of CBA. This sort of behaviour is appalling, it's almost like a threat to the rest of us that we need to keep giving them business or we are next in line to lose our accreditation.
  • Incognito | 23 Feb 2017, 03:16 PM Agree 0
    It's a pity as some brokers don't do huge volumes or are struggling to build up to volume.

    Lenders have their niches - and my deals just haven't fallen in CBA's lately.

    My CBA BDM is really nice and very keen. I haven't received the letter but I'll be disappointed if i do.

    Brokers remember these things for ages.

    Like Westpac slashing commissions or Macquarie slamming the door during the GFC. Takes years to un-remember and forgive that's all.
  • Mike | 23 Feb 2017, 06:03 PM Agree 0
    I am not sure why you would still be using the CBA, their service and return of calls is appalling, we deal in the larger transactions $1m , they do not impress me one bit, they are slow, unresponsive and very negative, they have successfully turned themselves into a Building Society
  • Papery | 23 Feb 2017, 06:43 PM Agree 0

    Now, I don't put deals to CBA unless they are the optimum fit for the clients, & over the last few months CBA hasn't been for a variety of reasons, but like most Brokers, I object to not being able to put Australia's biggest Lender forward as an option & yes there are other Loan options/lenders who meet the not unsuitable test, but the actions by CBA just stink of discriminatory & anti-competitive behaviour.
    How can a Lender like CBA only half participate in the Third Party channel??
    Will they cancel the accreditations of Aussie Brokers who don't submit enough deals?
    Will CBA (& other Lenders) consider Brokers more expendable with the emergence of FinTech players ?
  • Sunny | 23 Feb 2017, 08:15 PM Agree 0
    Where is MFAA?.
  • Confused | 24 Feb 2017, 10:27 AM Agree 0
    So CBA start unaccreditating people who don't use them.

    Then all of those people whinge and moan, despite the fact that having CBA accrediation can't be that useful for them or their customers (given they never use them) ... ....

    Doesn't really make sense, does it? Or perhaps these people just love being able to use the CBA brand in all their marketing etc ? Or people just like to moan.
    • Not Confused | 24 Feb 2017, 11:56 AM Agree 1
      I think it's more to do with the fact that they are uncompetitive but still want you to send business to them or get cut off, this seems like a conflict of interest for brokers.

      Imagine your broker just recommended CBA to you and your new loan settled, you would be sitting there, after reading the press reports, wondering if this was a good loan for you or a good loan for your broker so that they could meet their minimum loan volumes? This goes against the very core of what most brokers believe in.

      I hope that helps clear up the confusion.
  • WA | 24 Feb 2017, 12:05 PM Agree 1
    The CBA has done the same trick probably 7 or 8 years ago. From memory they want brokers to lodge 4 deals per quarter or else! I wrote back to them and told them where to go and has not given them a single deal since. Brokers do not need CBA, they need us.
  • Awesome Albert | 25 Feb 2017, 08:44 AM Agree 0
    Yep WA, I also remembering the same thing happened when the GFC hit and then they charged a fee to get reaccredited. We need them on the panel so we can offer a Big 4 Bank so clients can compare. So what is the fee this time?
  • Simon | 25 Feb 2017, 09:42 AM Agree 0
    I am (still) a Diamond broker with CBA due to my previous written volumes - their policy niches were of particular value to a large percentage of my client demographic, and they provided a "natural" fit. Their service (24 hour approval) was exceptional and we had great branch staff locally ensuring my clients were well looked after. Their pricing wasn't market leading, but it was strongly competitive in this space. They often reached 20% of my monthly settlement volumes.

    I've now written 3 loans with CBA in the last 24 months, less than 1% of my volume. Two of those were existing customers with small top-ups in LMI range so too expensive to leave. In that time, I have seen >14 day turnarounds, uncompetitive rates, and a significant deterioration in branch service levels. Their policy niches have been substantially reduced, and I now see very little reason to ever consider them as an option.

    I've actually been surprised any broker has been writing CBA over the last twelve months - I feel sorry for the public who walk into a branch for their loan. Clearly CBA must have a niche/pricing advantage somewhere, as brokers are still writing business there - I'm just yet to see it.

    I understand CBA's course of action - deregistering brokers with Zero lodgements in 12 months - however this should be able to be overcome simply by completing a refresher course to confirm credit policy knowledge. THIS is actually a bigger issue than the commission review and should be the focus of investigation.
  • ICTMan | 25 Feb 2017, 09:52 AM Agree 0
    Wow, I wish I could maintain distribution agreements in my industry without actually distributing anything!

    And, earn a 'trail' income on each solution placed.
    I'm not sure what ongoing effort occurs to justify the trail?

    I think you guys are a little out of touch, sorry!
    • Anon | 27 Feb 2017, 12:05 PM Agree 0
      Wow, I wish I could maintain distribution agreements in my industry without actually distributing anything!...FYI we don't hold the agreements.
      I'm not sure what ongoing effort occurs to justify the trail?....it's not that hard to find out.
      I think you guys are a little out of touch....this just means you have no understanding of our industry or how it works, but hey thanks for stopping by and adding SO much the conversation.
      sorry...no you're not.
    • Broker | 01 Mar 2017, 12:36 AM Agree 0
      " I'm not sure what ongoing effort occurs to justify the trail?...."

      Perhaps you could educate yourself in this area , prior to posting your next comments !
  • Skeptikal | 25 Feb 2017, 11:01 AM Agree 0
    Ok. CBA bullying yet again. No surprise to veteran Brokers. Where are our Broker Associations on this? They are very quiet on the matter. What about the Aggregators? Maybe they should ALL consider removing CBA from their lenders panel? Would that be third line enforcing?? CBA are effectively forcing Brokers in fear of losing their accreditation to recommend products that may be unsuitable to their clients. Come on Aggregators and Broker Associations Don't sit on your hands in fear. Speak up for your Brokers.
    • Chris Szigeti FBAA Director and Vice Chair | 27 Feb 2017, 11:12 AM Agree 0
      FBAA comment last Friday in the AGE and link attached -:

      Peter White, executive director of the Finance Brokers Association of Australia, said the cull raised ethical questions about the bank's relationship with brokers.
      "Our regulator needs to look very closely at these sort of things," he said.
      "The best interest of the borrower is the only thing that counts and they are restricting that."
      http://www.theage.com.au/business/banking-and-finance/commonwealth-bank-cutting-ties-with-mortgage-brokers-who-dont-send-enough-business-their-way-20170223-gujfwt.html
    • ed ridge | 03 Mar 2017, 09:23 AM Agree 0
      Hi Mr Szigeti, thanks for stopping bye and commenting. Is this all the FBAA is going to do? While a piece in The Age is a start can you tell us what the FBAA has done besides this? Has the FBAA spoken with CBA directly? Would be interested to see if there is more than just a quick headline.
  • A broker | 25 Feb 2017, 01:02 PM Agree 0
    Not surprising really. We've been here before with CBA. Their loss ultimately. I think it's the heavy handedness with which CBA approach this. I can appreciate that "inactive" brokers should occasionally require an accreditation refresher to maintain their accreditation.
  • | 01 Mar 2017, 04:30 PM Agree 1
    ASIC needs to investigate this behaviour and I would question what value is an Aggregator when a Broker's individual volumes are more important than the aggregated volume submitted to a bank.

    You don't need to lodge business with a bank to be able to stay on top of lending policies and rates. The tools and resources are readily available to do the research when and as needed.

    What will happen to Brokers who have a good CBA loan book, have not written any new CBA business in the past 12 months because of non-competative interest rates and terrible service, but need to continue to service their exisitng CBA clients? Does this mean they can no longer service those clients?

  • Broker | 03 Mar 2017, 02:04 PM Agree 0
    Very well stated , I wont be holding my breath for any Aggregator or ASIC to take a stand on this.

    The only way CBA will learn to appreciate business from Brokers, is for Brokers to avoid them all together. Poor service and pricing gives me no reason to recommend them to my clients, so why do Brokers use them ( other than large acreage in woop woop!) is anyone's guess.

    The arrogance from this bank is shocking and has been for as long as I can remember.
  • Tim H | 08 Mar 2017, 09:50 AM Agree 0
    I have never been accredited with CBA and don't have any urge to. I did see one of these letters sent to a fellow broker however and besides the cancellation of his accreditation what annoyed me and him most was the wording of the letter. The implication was that the bank believed brokers needed to maintain professional standards and adhere to responsible lending criteria and that as the broker was not submitting regular deals to CBA then he must not be doing this.
    This broker colleague has been in the industry for over 25 years, writes good volumes and has a solid knowledge of credit policy with lenders. He also maintains high ethical standards and presents as a professional businessman but still CBA implies he is not good enough to be accredited with them.
    ASIC is doing a review in to broker remuneration at present and spent numerous hours on this. We have however not heard a peep from them in regard to this and previous conduct by CBA. What is going on ASIC ???
    CBA rather than using this heavy handed approach need to ask the question "Why haven't you submitted deals to us?". The numerous brokers on this forum seem to know the answer but not the bank themselves.
  • Going for Broker | 23 Mar 2017, 12:29 AM Agree 0
    "CBA rather than using this heavy handed approach need to ask the question "Why haven't you submitted deals to us?". ...Maybe they just don't care!!
  • lol | 18 Apr 2017, 02:23 PM Agree 0
    how this isnt something apra looks at is beyond me
  • Steve McClure | 02 May 2017, 11:56 AM Agree 0
    I'm not offering an opinion, just asking an observatory question: Have any of the Aussie Home Loans (80%, perhaps soon 100% CBA owned) brokers had their accreditation cancelled? If not, is that because all consistently write CBA loans? Otherwise, it doesn't look good if your employer wont accept loans from you, but you can send them somewhere else. Maybe its one for ASIC's vertical integration considerations.
  • steve reid | 18 May 2017, 04:42 PM Agree 0
    do we all get the message now !!!!
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