The MFAA has again called for urgent assistance to the non-banking sector, saying that the innovators and drivers of competition in the market need to be adequately funded if Australia is to transition to a more competitive lending market.
This comes after JP Morgan executive director, Sofie Sullivan-Becaus labelled non-bank funding a 'critical’ issue that is in need of immediate additional support at the Finsia
annual conference last week.
The MFAA has lobbied and made submissions for many years since the GFC about levelling the playing field for banks and non-banks. In its second round submission to the Financial Services Inquiry, the association argues that the ‘lending sector’ is not as competitive as it should be and that is to the disadvantage of consumers.
“Larger banks have grown (and the market has become more concentrated), not because they are ‘more efficient’ or as a by-product of competition, but because of government intervention with wholesale funding guarantees and savings guarantees and allowing mid-tier banks to be acquired by larger lenders along with the availability of securitised funding to smaller lenders shrinking dramatically,” the submission states.
“Even the Government’s ill-considered decision to ban exit fees, favoured the larger banks to the disadvantage of the smaller banks and non-bank lenders.”
Phil Naylor, MFAA CEO says the association will continue to fight for a more competitive lending market.
“The MFAA continues to call on the federal government to actively facilitate funding of non-bank lenders, to ensure that Australian homebuyers have a wide range of competitive choices when it comes to securing a mortgage,” he said.