ASIC to undertake new review of brokers

by Julia Corderoy16 Nov 2015
ASIC has revealed plans to undertake a review of mortgage brokers in regards to interest-only lending.

Speaking at the FBAA conference held in the Gold Coast on Friday, ASIC senior executive leader – deposit takers, credit & insurers, Michael Saadat, said the regulator would turn its focus to mortgage brokers following its recent review of banks in regards to interest-only lending.

“Going forward we intend to undertake a further review in the interest-only area moving on from lenders to brokers with a particular focus on brokers’ consideration of consumer requirements and objectives,” he said.

“To share some feedback we have gotten from lenders and brokers in this space – and I will try and be completely open with you – ever since publishing our report on interest-only loans and getting the lenders to agree to make the necessary changes, I keep getting asked by lenders what is ASIC doing to make sure brokers will also make changes to their processes. 

“When I have spoken to brokers, I’m asked what is ASIC going to do to hold lenders to the same account as brokers.”

However, Saadat said it is important to remember that both lenders and brokers have their own separate responsible lending obligations to uphold. 

“Lenders seem to be worried that by raising the bar on the information they require brokers to collect from consumers that brokers will shift business to lenders who need less information. 

“Brokers also tells us that the information ASIC says needs to be collected, for example information about a consumer’s requirements and objectives, is information that brokers are already collecting as a part of their normal process with their clients. 

“It is important to remember that both lenders and brokers separately have responsible lending obligations to meet. It is not good enough for a lender to point the finger at brokers and it is not good enough for a broker to point the finger at lenders.” 


  • by Clarke Kent 16/11/2015 8:50:53 AM

    Another wasted tax funded exercise. ASIC need to find another industry to whip to death through over compliance and zealous public servants!

  • by GC 16/11/2015 8:58:39 AM

    The consumers requirements should not be the concern of ASIC or anyone else. It's none of their business whether the client wants I/O or P&I loans. I am fed up with these inane institutions thinking they can tell us what we should be investing in and how we should be structuring our finances. I have been successfully investing in property for over 15 years.

    I and my clients didn't need the likes of ASIC in the past and we dont need them now.

    The Govt needs to step in ans reign in these powers as it will lead to massive reductions in lending and the unintended consequences could be huge. We have already seen the start of this with sizeable reductions and its bound to get worse before these "know-all" clowns in ASIC realise the damage that has been done.

  • by Chappo 16/11/2015 9:03:51 AM

    The lenders are the ultimate approval point and the ones who actually lend the money, in the structure THEY determine. I can put forward a proposal with Int Only repayments, as that is was best suits the client, only to have the lender say they will only do it P&I.

    ASIC beter start investigating borrowers who think Int Only is the best loan structure and give them a good talking to!