Brokers tell ACCC: 'Get rid of mandatory MFAA memberships'

by Adam Smith20 Jan 2012

Brokers have sounded off on an ACCC review into compulsory MFAA membership, expressing their anger with third-line forcing notifications.

The competition watchdog is currently undertaking a review of third-line forcing notifications submitted by companies such as Mortgage Choice and Aussie Home Loans, making MFAA membership mandatory for their franchisees.

Several brokers answered the ACCC's call for submissions into the benefits and detriments to consumers, and have rejected the idea of forcing notifications.

In a submission to the ACCC, Australian Loan Company broker Ian Dennis argued that, as a credit rep for an ACL holder, he is already provided with training and compliance tools.

"I have been broking for seven years and find it a difficult run to pay $500 a year for something I have not received any benefit from," Dennis wrote.

Dennis said he had let his MFAA membership lapse due to "the high cost involved", and contended that he would not use lenders who required association membership.

"By being a member, there is no benefit as everything they offer I can get from my licence holder, and I am already paying them a fee and a split of my commission which is enough pressure on earnings without having to deal with peaks and troughs in consumer needs and confidence and paying more to join one of these bodies," he wrote.

Dennis urged the ACCC to consider the needs of "one man band" brokers in its review.

"We are the ones that are the backbone of the industry. We are the ones that the big players fear when it comes to their market share," Dennis wrote.

Melinda Young of Mortgage Simplicity said there was no benefit to consumers, brokers or lenders in requiring MFAA membership.

"There are many other accredited training organisations that can satisfy training and continuing professional development programs for mortgage brokers," Young wrote.

Young added the advent of licensing meant MFAA membership no longer served as an industry benchmark.

Mortgage Choice put forward its own submission, defending its forcing notification. The company claimed consistency among its franchisees was behind its decision to make MFAA membership mandatory, and said it could more effectively influence an industry association to the benefit of its franchisees if franchisees were required to belong to one industry body.

"That being the case, Mortgage Choice needs to choose which industry body it believes best serves the interests of its franchisees. In Mortgage Choice’s opinion, the MFAA remains the most appropriate such body," the company said.

Related stories:

MFAA review sees ING Direct, Mortgage Choice at odds

Watchdog zeroes in on mandatory MFAA membership


  • by Barry Sims 20/01/2012 10:24:37 AM

    The MFAA is totally and completely incompetant
    I am a credit representative with PLAN who provide all of the necessary support I need for full compliance

  • by TB0NES 20/01/2012 11:12:19 AM

    I'm a full Credit Licence holder and have appropriate support from my Aggregator (AFG) so i don't see the need for MFAA/FBAA membership, not that i've ever seen a need for it...

  • by DB VIC 20/01/2012 11:27:47 AM

    The MFAA have provided little value to industry members, other than line their own coffers with the money they have received from the lenders that sponsor them and their events. I cannot see how the MFAA actually play any part in the future of this industry, given ASIC's role. As a broker, i have paid my fee to the MFAA annually, i have nominated myself 3 times for council represntation. I never hear from or see the MFAA reps, and i am trying to figure out what value they have provided. In 10 years of Mortgage and Finance broking, i have yet to have a client who has asked about the MFAA, their involvement, requirements or benefit and it makes no sense to pay fees to a body that cannot even stand up as a voice to the brokers, when we have seen reduction in commissions, higher costs of doing business etc. MFAA wake up to yourself - you have been made redundant by ASIC and their involvment (not that you were ever of any value) and ASIC should stand up and do the right thing by the broking community. Remove the mandatory requirements of MFAA membership. Maybe then the MFAA will realise that to charge a fee, you need to offer value, something new, different, supportive or the like, not charge brokers a membership fee, so that you can promote lenders at your annual conferences. Wake up MFAA - your days are numbered.