'Amen' to MFAA disclosure stance, say brokers

by Mackenzie McCarty11 May 2012

Brokers have given the MFAA a heavy pat on the back for talking tough to the government on the current requirements for multiple forms of credit disclosure documentation.

Yesterday, Australian Broker Online reported the MFAA had requested the government ditch the current form of disclosure documentation, and combine credit quote, guide and proposal into one document.

The MFAA claimed that the plethora of documents required had caused inconvenience to both brokers and customers. CEO Phil Naylor said the splitting up of these docs had also increased cost.

Speaking with Australian Broker, Peter O’Connor from Cavalier Finance in Brisbane said he welcomed the MFAA's lobbying approach on disclosure documentation.

O'Connor said as the situation stands, “we have to get through an inch of paper” before even getting to the application, and that customers often "don't want to know about it", and don't read the documentation.

O'Connor said in addition, brokers who elect to take customers through the documentation are put at a competitive disadvantage, with customers feeling they are too difficult to deal with.

On the Australian Broker Online Forum, 24 industry players, mostly brokers, were moved to comment on the approach, with most supporting the MFAA's move wholeheartedly.

Commenter Nicloe (10 May 2012, 10:18AM) said in her experience customers did not read the documents.

"I send by email the Credit Guide and the Privacy statement immediately after the first contact. Each has a 'sign here'. Very few sign and send back and I then have them sign an original at the first face to face meeting. As for all the other docs, my research is that they are simply not reading them either."

Melo (10 May 2012 09:59 AM) agreed the government had made the documentation too dense.

"NCCP over-complicated a simple process. It should be one page document, without all text and crap."

Industry consultant Kym Dalton (10 May 2012 10:08AM) argued disclosure and comprehension were not the same thing. "Evidence is that the greater volume of disclosure, the less is meaningfully comprehended," he said.

Meanwhile, Rach (10 May 09:57 AM), along with many other brokers on our site, was moved to praise the MFAA's stance. "Amen to the MFAA!" she said.

COMMENTS

  • by Jitesh Raniga 11/05/2012 9:59:08 AM

    I fully support the MFAA stand and this will put brokers at a disadvantage point as clients going to the bank direct does not have to face this.

  • by Steve McClure 11/05/2012 10:08:14 AM

    OK, I'm different, because I don't think 1 page or so can suitably show the client what you are doing for them, cover privacy, commissions, as well as show that you've made the necessary calculations for the client. Shouldn't we be using the compliance documents as an opportunity to show the clients our value proposition and draw attention to the benefits we provide over a "back of the coaster" deal? It's part of a professional presentation and it's not an inch of paper. We just have to do it better, electronically and cut out the requirement to duplicate the responsible lending clauses on the lender's app form.

  • by Peter 11/05/2012 10:09:21 AM

    don't pat MFAA on the head too soon. This doesn't mean that the government will agree to a change.

    Is this action by MFAA enough to saving the dying membership moving over to the FBAA? I don't think so, they have to try harder than that.