Ban on exit fees still hurting smaller lenders

by Caroline Dann20 Sep 2012

Phil Naylor has reiterated his stance that the ban on exit fees is detrimental to competition between lenders, in the wake of ASIC’s report earlier this week.

The report looked at how the ban was tracking with lenders, concluding that most were compliant and customer complaints were low.
However, Naylor claims the bigger issue is how smaller lenders are losing market share as a result of the ban.
 “We resisted [the ban], and although unsuccessful in our opposition, our predictions have eventuated, in that the smaller lenders are losing market share to the larger lenders,” he told Australian Broker Online.
It’s a standpoint Naylor made public earlier this year, after submitting his views to a senate enquiry.
"The ban on exit fees has brought about no improvement in industry competition and has merely reinforced the dominance of the major banks and depleted the force of the smaller and non-bank lenders,” he said at the time.
“Clearly the solution to the lack of competition does not rest in banning exit fees." 
Related news:

Exit fee ban a clear failure: MFAA

ASIC ‘reminds’ banks to acknowledge clawbacks


  • by Qld Broker 20/09/2012 10:02:25 AM

    Damned if you do and damned if you don't. Whilst the government touted competition as the driving force behind their decision I think it's fair to assume they done it for the public exposure. Bank bashing is all the fad these days. However, I don't agree that banks should hold an axe over someones head if they can't be competitive on service or price. One or the other can make sure a client is happy where they are, and lets face it, banks are still profitable big or small. I can honestly say I haven't seen to many of my clients refinance away from the lenders I have set them up with to date.

  • by 1martym1 20/09/2012 11:44:12 AM

    But regional lenders increased market share by 12% yoy? If by small you mean mortgage managers dressed up as non banks then I cant agree. They were never a real competitive force anyway.