Rate hikes “indicative” of competition issues: ACCC

by Miklos Bolza18 Oct 2017
The chairman of the Australian Competition & Consumer Commission (ACCC) has expressed concerns about joint motions made by the banks in relation to regulatory changes.

These remarks come from the government’s Review of the ACCC Annual Report 2016 tabled on Monday (16 October), which examined the regulator’s response to a parliamentary hearing earlier last month.

The ACCC chairman Rod Sims said that interest rate hikes by the banks in response to Australian Prudential Regulation Authority (APRA) restrictions “reaffirmed” the regulator’s concerns about competition in the sector.

“It's hard to say more until we get [the banks’] documents, but you'd have to say the banks reacting in the same way to something where they could have gone this way or that way is always indicative of the general concerns we've got.”

The ACCC has been tasked with inquiring into residential mortgage products, in particular price changes or proposed changes by the banks in response to the major bank levy.

Sims said the results of the inquiry were to be released in early 2018 with the aim to create some firm facts as opposed to mere speculation.

The inquiry will focus on two areas in particular, he said.

“We're firstly looking for evidence of what the process is so that we can understand it more fully than we currently do, but we're also looking for the actual decision-making documents that might, in a sense, open up the black box, the one that has always been quite hard for consumers to understand.”

As well as providing transparency, Sims said the report would uncover why the banks chose to raise rates and what these moves mean for both the market and consumers.

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COMMENTS

  • by Regional Broker 18/10/2017 9:39:21 AM

    If The ACCC has a concern about competition , they should be finding a way to support The Mortgage Broking industry, who provide alternatives and are obligated to "know" their clients and their needs.
    We are then obligated to look at alternatives and recommend a "not unsuitable" product , as opposed to one of the big four who can only recommend or use one of their products .

  • by Bottom Line 18/10/2017 11:39:57 AM

    Govt bodies are all screaming we need more competition; yet for the last 2 years, all govt bodies have done, is make it harder for Brokers to survive....& blow out Broker business costs.
    Yet without brokers, there would be little competition anywhere; allowing a return to the 18% days...when the big 4 ruled without competitors.
    Everybody wants to change something that works (brokers), so they can puff the chest out, and say they were part of the success with the changes they made (even if those changes made it worse, not better).

  • by Michael from SA 18/10/2017 2:07:19 PM

    Seems a bit absurd that Rod Sims suggests banks could go this way or that but all went the same way. What other way are they supposed to go if APRA is demanding rates go up on certain loans?
    This is a farcical witch hunt.
    The banks do wield a bit of power. Who allowed the banks to swallow up regionals like BankWest & St George, etc? Wayne Swan allowed CommBank to buy BankWest. Go tell him he's a DH. I did.