ACCC may turn eye on brokers

by Miklos Bolza24 May 2017
New powers given to Australia’s competition watchdog may go beyond simply asking banks to explain rate rises and may be extended into the mortgage broking sector.

Rod Sims, chairman of the Australian Competition and Consumer Commission (ACCC), has indicated that the regulator’s broad information gathering powers could be widened to include the second tier banks and mortgage brokers.

“Eventually we could look at a range of things, but for this first year, if we judge that the broker market needed to be looked at we could do that,” he told Guardian Australia.

“We haven’t formed that view yet. We’re just really focused on getting information from the five banks.”

While the ACCC would not comment further on this when contacted by Australian Broker, a spokesperson did say that a new Financial Sector Competition Unit was being built to look into specific competition issues across the industry.

The unit’s first task will be to commence a one-year price inquiry into residential mortgage products up until 30 June 2018, they said.

“As part of this inquiry, the ACCC can compel the major banks to explain any changes or proposed changes to fees, charges, or interest rates in relation to residential mortgage products affected.”

As well as checking the veracity of the banks’ claims, the regulator would also inform the public about misleading representations, the spokesperson said.

A baseline for residential mortgage products will also be established with banks required to explain changes to fees, prices and charges over time.

“The ACCC will also provide customers with transparency as compulsory investigative information gathering powers will allow the ACCC to substantiate claims made by banks in relation to residential mortgages,” the spokesperson said. “Through that, the ACCC will be able to provide consumers with a better understanding of how the big banks make decisions on changes to their mortgage rates.”

This added transparency will have an “important effect” on bank behavior, they added. 

With regards to the bank levy, further assessments will be conducted over the coming year in relation to any pass through of the proposed tax to help assess competitiveness within the banking sector.

Related stories:

Budget will have little impact on house prices: Moody’s

Housing and big banks in Budget spotlight

‘Bank tax’ may inflate mortgage rates

COMMENTS

  • by Keith Bridges 24/05/2017 9:07:57 AM

    This is government bureaucracy gone ridiculous

  • by Simon 24/05/2017 9:19:15 AM

    Anything that shines more light on the "profit-procedures" of the banks will help our industry.

    The biggest threat to Mortgage Broking is still the lack of understanding and naivety amongst the general population of how (and why!) Banks operate.

  • by Broker who cares 24/05/2017 9:24:30 AM

    Good focus on us. Find out that we review our clients annually to make sure they're on the best pricing.
    Find out that when every fixed rate comes off we ring the client and find out what's best for them.
    Find out that most brokers are passionate about getting their clients the best deal.
    Find out that brokers don't churn unless the client actually saves money by moving. (Or its already illegal)

    Then maybe they'll realize its the banks who screw over their existing customers not brokers. Keeping existing clients on higher rates is how the banks take advantage of apathetic borrowers. Lucky my clients have me.