Calls for the expansion of the national credit code to protect small business have been met with a mixed reaction. We speak to Ken Sayer or Mortgage House and Ranjit Thambyrajah of Acuity Funding for their arguments for and against the proposal.
Video transcript below:
Donna Sawyer, Australian Broker TV
Donna Sawyer: The mortgage broking community is divided over the calls for the expansion of the National Credit Code to protect small business. Ken Sayer of Mortgage House says NCCP should be extended as Mum and Dad businesses are being increasingly caught up by bank led property revaluations.
Ken Sayer, Mortgage House
Ken Sayer: Even if their business is going to plan, they can’t find half a million dollars or a million dollars in the short term with little notice. So what I am trying to say is, they should be made aware and if they are not made aware, they should be allowed some flex given that set of circumstances. Because nobody, some, we would hope that properties would appreciate in value, what most people don’t bank on is a depreciating value and the consequences thereof.
Ranjit Thambyrajah, Acuity Funding
Ranjit Thambyrajah: In every instance, it’s not the first phone call from the bank manager that client is complaining about. The banks have been very very good with their client base, they have given them plenty of notice, they have, usually they have a relationship with the client and they have actually explained why the problem is there and they have given them plenty of time to fix it up.
Donna Sawyer: Ranjit Thambyrajah of Acuity Funding says the proposed regulatory changes would hinder business and create more red tape for brokers.
Ranjit Thambyrajah: NCCP is good for what it’s there for, which is to look after consumers, look after people that aren’t fully aware of lending and lending policies and what that could mean to them and their future borrowings. Small business is very different, small to medium size business, they are very different, they are more sophisticated, they know what they are doing. They had, in fact they are quite, quite often they actually don’t want any intervention by government, they want to be allowed to make their own minds up and do what they want and are prepared to weigh the risk of that, it’s a risk and return relationship and they do not want to be hampered.
Ken Sayer: These guys are losing half their working life in a single blow. So I mean, I have a problem with that and we should work much closer to small to medium businesses. I think if we can protect these businesses from inadvertent failures, we are all going to be better of.
Ranjit Thambyrajah: For a broker to be properly equipped to work in a environment where NCCP covers some commercial type transactions, it will take a lot more training and also a lot more experience so that will make it very difficult.
Ken Sayer: It’s the same as every enhancement, we all resist upfront but it actually turns out better for the industry in the long run. So what I am asking everyone to consider is to possibly raise the standard or lift the level of professionalism, we will all be better off in the long run.
Donna Sawyer: This is Donna Sawyer reporting for Australian Broker TV.