The MFAA has called on the government to ditch some of the disclosure documentation required by the NCCP.
In a submission to Treasury on the proposed NCCP amendments, the organisation has asked the government to dump the credit quote, credit guide and credit proposal required from brokers, and instead combine the forms into one finance broking contract. The plethora of documents currently required has caused inconvenience for both brokers and borrowers, the MFAA claimed.
“Each of these documents is required at a different stage in the transaction. The need to do these things at different times is a significant additional cost to brokers, and inconvenience and confusion to broker and customer alike,” the organisation said.
The MFAA called the requirement for the three separate documents an “unexpected and avoidable” cost to brokers. It claimed that the disclosure required by the NCCP could easily be satisfied by the finance broking contracts previously used in NSW, WA and Victoria.
“We are not aware of any problems with the previously required document,” the MFAA said.
To drive home its point, the organisation included in its submission testimony from an unnamed, mid-sized aggregator, claiming that the burden of compliance cost the company upwards of $150,000 a year. The aggregator went on to say that its brokers had seen their productivity hampered by the introduction of the required NCCP documents.
“Whilst a number of these documents replaced previous documentation and processes, the findings from our compliance audits indicate that it takes much more time for a broker to write a deal post the implementation of NCCP and responsible lending obligations versus before,” the aggregator said.
The MFAA said the simplification of the required documents would assist consumers and reduce compliance costs for brokers. While the association said it supported regulation of the credit industry, it warned the government off of regulating too much, too soon.
“MFAA has been a strong supporter of enhanced regulation in the credit sector, but it is essential that the rate of change to regulation is now slowed to allow the market to have commercial certainty and for new businesses to plant green shoots,” the group said.