Do you think ASIC understands the mortgage broking industry?

by AB30 Nov 2015
Following ASIC’s newly revealed plans to undertake a review of mortgage brokers in regards to interest-only lending, many brokers have expressed their dissatisfaction with the corporate regulator.

Commenters on Australian Broker’s report of the announcement, made at the FBAA conference by an ASIC senior executive, have said that ASIC is completely out of touch with the mortgage industry.

A commenter using the pseudonym “Chappo” said that ASIC needs to understand that it is the banks who ultimately make the rules.

“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 interest only repayments, as that is what best suits the client, only to have the lender say they will only do it P&I.”

Further, Chappo said ASIC needs to take more of a front foot in investigating and educating consumers.

“ASIC better start investigating borrowers who think interest only is the best loan structure and give them a good talking to!”

Commenter John Sanders said also ASIC needs to turn its main focus from brokers to banks. 

“Why don't [ASIC] investigate how clients who have come to me for a home loan and I cannot help because they have no financials have got a loan via major bank branch?

“Do the same rules, requirements not apply? Apparently not, because branch managers have a DUA to push loans through purely based on a client’s bank statements and gross turnover whilst brokers have to rely on net profit.”

Meanwhile, a commenter using the pseudonym “GC” said the scope of ASIC’s regulatory powers are too wide.

“The Government needs to step in and 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 it’s bound to get worse before … ASIC realise the damage that has been done.”

Do you think ASIC properly understands the mortgage broking industry or is there a disconnect? Let Australian Broker know by having your say in our online poll now.


  • by Barb 25/11/2015 8:54:00 AM

    No I feel they have jumped the gun it is very frustrating especially for serious investors who's lending portfolio has been sizeable reduce to all this new changes.

    Welcome back to old lending fashion lending from the eighties.
    Did we not deregulate banks in the eighties so the banks could run as a business?

    We are now back in the same boat.

  • by Grahame 25/11/2015 9:06:43 AM

    In fairness to ASIC they have tried to do their best but have been saddled with too much police work. Originally they were to control corporations because the states could not manage a uniform companies act which was never uniform.

    I think another body simular to the ASAB with representatives from the MFAA and FBAA.

    You need people who have worked in the industry and understand the industry.

    Also the education level needs to be lifted. There are still a lot of cowboys out there talking garbage and bending the rules.

    The next property recession will see a lot of suffering amongst home owners and investors. That is when the banks will pay more attention to brokers.

  • by Broker 25/11/2015 10:38:54 AM

    I think it would be fair to say that based on recent amateurish commentary coming out of ASIC of late, that they are fairly clueless on many aspects of the mortgage industry.

    Brokers are essentially paid on performance , there would be many empty desks at ASIC if the same remuneration structure applied there!